Summer Economic Statement 2017: Statements

The Government published its annual summer economic statement yesterday. It outlines the broad parameters that will underpin discussions on our economic and fiscal policy over the medium term and the main pillars of this approach. It revolves around six key principles: ensuring sound and sustainable public finances; managing public expenditure carefully; targeted increases in investment; a tax system that is growth friendly and fair; ensuring inclusive growth; and facilitating access to SMEs. The statement also provides an updated assessment of the fiscal space for next year, estimated at €1.2 billion, which is consistent with balancing with our books next year. It provides my best assessment of the framework for discussions over the coming months on budget 2018.

On economic development, the outlook in the statement is set out in the stability programme update. I am greatly encouraged by the pace of expansion, with the preliminary estimate for growth in 2016 at 5.2%. On Friday, the Central Statistics Office will publish the outturn data for last year and the preliminary data for the first quarter of this year. The Department will then update its forecasts in advance of the budget, as is the norm. Growth is now increasingly driven by domestic factors, following an initially export-led recovery as consumer and business confidence recovers. This is important as growth in these areas is jobs and tax rich. The Department of Finance forecasts growth domestic product growth of 4.3% this year and 3.7% next year. From 2019 onwards, gross domestic product is expected to grow broadly in line with the potential growth rate of the economy, with positive contributions from export and domestic demand. In this context, it should be noted that gross domestic product is over-stated as a measure of living standards in the case of the Irish economy. Notwithstanding this point, economic expansion has been very strong in recent years. This growth while vital is a means to an end and not an end in itself. Growth allows us to raise living standards, advance social progress, promote inclusivity and provide better public services.

On the jobs market, we have now had 18 successive quarters of employment growth, representing an increase of over 230,000 jobs since the depth of the crisis. For every ten jobs lost, seven have been recovered. The latest data show employment growth accelerated to 3.5% year-on-year in the first quarter of 2017, representing the addition of almost 69,000 jobs. The number of people in employment has exceeded the 2 million mark since the second quarter of 2016. The unemployment rate has fallen. This has been broad based and the return to positive net migration is another sign of the positive momentum in the labour market. By the end of this decade, there will be more people at work in Ireland than ever before. It is important, in these circumstances, that budgetary policy leans against the wind and does not in the future contribute to overheating the economy.

The central element of the conduct of fiscal policy is that we remain on course to achieve our medium-term budgetary objective in 2018. Sustainable public finances are essential for economic growth. We must ensure a sensible budgetary policy in the future. The fiscal architecture under the Stability and Growth Pact provides the framework to facilitate the conduct of fiscal policy in a way that is sensible. Recent developments in the public finances show that, following a very difficult period, the public finances are continuing to improve. General Government deficit targets have been consistently over-achieved to date. This strategy has been implemented through a careful approach to fiscal and expenditure policy. The latest Exchequer returns for 2017 are very positive. Following a slightly disappointing performance in the first quarter of 2017, tax receipts have stabilised and cumulative receipts deliver a 4% improvement in comparison with a year ago. We are now well positioned to deliver an overall tax target of €50.6 billion, the highest in the State's history.

The pre-crisis period saw very large increases in expenditure. While these increases helped address important deficits and provided the resources for significant improvements, a difficult consolidation period followed and over the past three years budgetary policy in relation to expenditure has been careful and sensible, averaging 3% per annum below the nominal growth in the economy. This approach is necessary to avoid the need for future intolerable cutbacks that can be disruptive and damaging to our society. We must make choices. I will shortly publish two documents, the comprehensive spending review and the mid-year expenditure report, which will underpin this approach. Total voted expenditure for next year will be approximately €60 billion. The spending review must examine how we can make better progress in careful use of resources.

Investing in capital infrastructure is clearly a important way in which we will do this. Capital spending will be up 17% next year, 24% in 2019 and 85% in 2021 relative to 2016 levels. We will follow this work by the publication of a ten-year capital plan to lay out the clear choices in mapping out how Government intends to ensure that our public capital infrastructure will be of good quality for the future.

Turning to the fiscal outlook, a general Government deficit of 0.4% of GDP is projected for this year. I confirm that we will achieve our medium-term budgetary objective, which is a structural deficit of 0.5% of GDP next year, but it is my clear view that in the future we need to focus on our fiscal stance, and not just on our fiscal space. We have to ensure that budgetary policy is appropriate in supporting sound macroeconomic conditions and helping our economy grow in the long run.

We must be conscious of our overall debt levels that, while below the European Union average, are still of a level that could cause difficulty in the future and need to be managed carefully. To strike a new balance in how we manage this, I have decided to amend our previous debt-to-national-income ratio of 45% of GDP to 55% of GDP to deliver additional medium-term flexibility to look at how we can increase capital expenditure that would increase the ability of the economy to grow in a sustainable manner in the future. When we have completed significant projects, the Government can recommit and re-target a longer-term objective debt ratio of 45%. I am clear that the medium-term approach of 55% is the sensible and sustainable approach for our economy.

We must be conscious of the external environment in which Ireland operates. A rainy day fund was announced by the Government as part of the summer economic statement 2016. In this context, the Government will set up and maintain this rainy day fund, but with an annual contribution of €500 million per annum. This is half the size of the contribution originally envisaged, with the difference being used to finance capital investment.

The additional allocations will be subject to an assessment of the capacity of the economy to absorb the additional funding at each point in time. It is clear that the volatility of the economy can be pronounced. The rainy day fund will provide a sensible counter-cyclical buffer, with annual transfers from the Exchequer to the rainy day fund helping to mitigate against the ups and downs of the economic cycle. The Government will also reassess the role of the Ireland Strategic Investment Fund, ISIF, which was established at a time when private investment was constrained, and consider whether an element of the ISIF should be reoriented towards complementing the rainy day fund, as I have just described.

Turning to the issue of fiscal space, the statement sets out that the estimated indicative net fiscal space over the period 2017 to 2021, inclusive, is over €11.2 billion. I emphasise that the net fiscal space is the amount that remains after providing for pre-committed policies in the area of capital expenditure dealing with the consequences of demographics for our society. For next year, my Department estimates that net fiscal space amounting to €1.2 billion would be consistent with delivering a balanced budget. Of this, approximately €700 million will be absorbed by the full-year cost of measures implemented this year. Without any other change in our policies, this would leave just over €500 million for new measures. This leads back to the earlier point I made that, at overall public spending of over €60 billion next year, it is now crucial that we focus on the totality of expenditure and not just incremental changes.

As our recovery is now entering a more mature phase, we must broaden the definition of economic success for the future. We must recognise that success will be incremental, and that additional and existing resources we are providing are already yielding benefits. The results will not be instant, but we must keep at reform and at providing additional resources.

Can we get a copy of the Minister's speech?

I have requested that.

It is important that the fruits of economic recovery are spread as evenly as possible and while the short-term economic prospects are positive, a continuation of robust growth can never be taken for granted. We must not lose sight of both our risks and opportunities and the budgetary framework I have outlined aims to strike that balance.

I am pleased to have the opportunity to contribute to this debate this morning. I welcome the fact that we now have a summer economic statement, which is only a recent development. The introduction of the summer economic statement is one of the reforms to the budgetary process that has occurred. From the point of view of Parliament's engagement with the budget process, the delay in setting up the Parliamentary Budget Office has been a major disappointment. Only yesterday, a director of this new Parliamentary Budget Office was announced and I wish Ms Annette Connolly every success in her new role. The office is still not up and running and this is the second budget of the Government where the promised office has not been in place.

The outlook for the economy is positive. On the various metrics, from GDP growth and the public finances to employment trends, the prospects appear positive. However, significant risks remain for the economy and we ignore these at our peril. The great unknown that remains Brexit and the uncertainty about US corporation tax and investment policy represent massive, unquantifiable challenges for an open economy like ours.

On the potential impact of Brexit, the summer economic statement is stark, as was the Department of Finance's own sectoral assessment on the issue. The agrifood sector is of particular importance in this regard. We are now moving into a prolonged period of a depreciated pound against the euro. This will inevitably affect business in Ireland, most notably with the agrifood sector, but also tourism and many other sectors. From a budgetary perspective, we need to be constantly aware of the fluidity of the Brexit situation and the assumptions we make now may not hold in a few months' time, not to mind in 2019 when the UK finally exits the European Union.

Other key challenges remain aside from Brexit. We have massive demographic shifts approaching us in the coming decades and those are already apparent. The expected larger and ageing population will bring inevitable financial pressures on areas such as health and social protection. We have the ongoing pension coverage issue with the majority of private sector employees still without a private pension. This will have to be addressed.

Along with my colleague, Deputy Dara Calleary, I look forward to engaging with the Minister, Deputy Donohoe, in the lead up to the budget in October. I had a good working relationship with the previous Minister for Finance, Deputy Noonan, and I hope we can continue in the same spirit with the current Minister.

Under the confidence and supply agreement, it was agreed to commit to meeting in full the domestic and EU fiscal rules. According to the summer economic statement published yesterday, we are on course to reach a balanced budget on structural terms next year. My party welcomes this, but it should not go unsaid that the Government breached the fiscal rules in 2016 and plans to do so again this year. In 2017, the Government's fiscal plan involves breaking both the expenditure benchmark and the structural deficit rules. In the case of the expenditure benchmark, the projected breach is €450 million, which is marginally below what the European Commission would regard as a significant deviation from the rules. It is confirmed from the summer economic statement that the target of 45% debt to GDP by 2025 announced in the previous budget has effectively been abandoned, at least for the foreseeable future.

It is because of the risks facing our economy that we support the establishment of a rainy day fund, however unfashionable it may have become in this House to support such a fund, and I am pleased that the confidence and supply commitment in this regard is being honoured. My party will work with all stakeholders now on the modalities of how such a fund will be established and how it will work in practice, which is a critical issue. The essential purpose of such a fund, from our perspective, is to avoid a situation where a future Government has to immediately increase taxes and cut spending when faced with a downturn in the economy which will come at some point.

It is again a priority for Fianna Fáil that the forthcoming budget provides for a split of available resources at a ratio of at least 2:1 in favour of expenditure and investment in public services over tax reductions. The confidence-and-supply agreement ensured that budget 2017 was the first progressive budget in many years and it is a priority for Fianna Fáil that this trend will continue. While the fiscal space is extremely limited by the carry-over effects of the previous budget and the possible extension of the Lansdowne Road agreement, we must continue to invest in the public services on which people rely on a day-to-day basis.

Housing must form a key part of the budget. The housing crisis is a human tragedy for thousands upon thousands of our citizens. It is also now a major economic problem.

It is now clear that the Government no longer plans to entirely phase out the universal social charge, USC. This was never achievable or desirable. The confidence-and-supply agreement clearly states that reductions in the USC should place an emphasis on low and middle-income levels. These income levels relate to people who have yet to feel the full benefit of the economic recovery outlined in the figures contained in the summer economic statement. This really puts substance on the term "a progressive budget". It is not just an economic phrase, it means helping those who have not benefited from the economic recovery in a meaningful and tangible way. The proposal to amalgamate the USC with PRSI raises many questions, not least in terms of what it means for a wide range of social welfare benefits. To date, we have seen no paper from Government on the proposal.

The commitment we secured to retain mortgage interest relief for existing recipients is a priority for our party and must be honoured in this budget. Mortgage interest relief is currently due to end completely for up to 400,000 existing recipients at the end of this year.

In order to grow the economy, there must be an environment that rewards initiative and enterprise. We urge the Government to improve the taxation environment for entrepreneurs and small and medium enterprises while remaining steadfast in respect of our commitment to the 12.5% corporation tax rate. Fianna Fáil recognises that this may not all be achievable in one budget but with Brexit on the way, we need to safeguard the country's competitiveness. We need to fulfil the commitment to introduce a new share-based remuneration scheme. The Government should reject and, if necessary veto any plans from the European Commission to introduce a form of common consolidated corporate tax base. It would be enormously negative for the State if that were to be introduced. The Minister has received a report from the independent expert, Mr. Seamus Coffey, on our corporation tax system. It should be published without delay in order that it can be given careful consideration over the summer break.

The risks facing the economy are clearly outlined in the summer economic statement. Chief among these is Brexit. In order to come to terms with these risks, sufficient investment in capital expenditure is needed. Listening to media reports in recent weeks, one might be convinced that capital investment is a Fine Gael idea. However, when one looks at the evidence, nothing could be further from the truth. In the summer economic statement, the Government has outlined how it wishes to reduce the amount invested in the rainy day fund from 2019 and invest the difference in capital expenditure. It is welcome that the Government has finally realised that we have a capital deficit crisis that restricts economic growth. The broadband plan seems to be going nowhere and has been delayed time and time again, and there is still an extensive problem with regional development. The Government announcements in the summer economic statement are not radical. It has again not fully explored the alternative methods of funding projects in Ireland. The NTMA has clearly indicated in its recent annual report that in the context of the low-interest environment, public private partnerships, PPPs, are a useful method for dealing with the infrastructural issues of the State. The Government has a self-imposed rule whereby no more than 10% of capital expenditure in one year can be spent on PPPs. In the context of the opinions expressed by the NTMA and the European Investment Bank, this rule is overly conservative and needs to be reviewed. Fianna Fáil welcomes the assessment that is now under way. By mobilising funding on the ground from both public and private sources, further investment can be attracted from the European Investment Fund. This is being inhibited by the restriction on PPPs. The Ireland Strategic Investment Fund, ISIF, has approximately €6.3 billion invested in its global portfolio in debt and equity instruments all over the world but not in Ireland. The ISIF is in the process of redirecting this funding on a commercial basis to the real economy in Ireland. This needs to be accelerated and could make a far greater impact than redirecting €500 million from the rainy day fund from 2019 onwards. The ISIF can invest in areas such as broadband provision, renewable energy and education. The model used in Dublin Institute of Technology needs to be replicated throughout the economy. By utilising these avenues, the Government would not have to raid the rainy day fund before it is even established. I reiterate that investment in capital expenditure is not a radical Government initiative. Fianna Fáil and others have long been calling for such investment.

In summary, the Irish economy is in a strong position but, as the summer economic statement makes clear, we are in very uncertain waters. For this reason, the right balance has to be struck in managing the public finances in a prudent manner and meeting the investment needs of the economy. In the months ahead, Fianna Fáil looks forward to making its contribution to how budget 2018 can contribute to achieving this objective.

Sa deireadh thiar thall, tá ráiteas eacnamaíoch an tsamhraidh os ár gcomhair. Dá mbeadh sé curtha ar athló níos faide, ní bheadh muid ábalta "an tsamhraidh" a úsáid sa teideal. Tá sé againn, áfach, ar scor ar bith.

After much delay, the latest set-piece in the ongoing Fine Gael plan to tell us how well everything is going and how it is managing the economy in such great ways was revealed yesterday. There is little new information contained in the summer economic statement. Rather, it is mainly a reconfirmation of what was already known. Areas on which Sinn Féin would have liked specific detail, such as the public sector pay agreement and its impact on fiscal space, water charges and other outstanding matters, were not included. We did not need a glossy publication and the Minister appearing on national radio to remind people that the Government missed an opportunity in last year’s budget and that not only did it spend that budget but also committed over half of this year's budget, thus leaving little spending room to address some of the serious deficiencies and pressure points in the economy. While one can discuss figures of €60 billion or €1.2 billion of net fiscal space, the reality is that, depending on the outcome of the ballot by public sector unions, between €300 million and €350 million is available for new spending.

We do not need this debate to recall that in last year's budget the Government prioritised tax cuts, many of which were to the economic benefit of the wealthier in society. It has become clear in recent days that the Government underestimated how much those tax cuts would cost. People do not need reminding that the EU fiscal rules, which were cheerled and championed by Fine Gael, Fianna Fáil and the Labour Party, have restricted our ability to invest in the economy and left us with the figures contained in the summer economic statement. Those figures indicate that we will only be able to invest between €300 million and €350 million in an economy that has been starved of investment for years and that now, when money and the ability to borrow at low interest rates are available, the rules say that we must wait until certain arbitrary figures are reached.

There has been much recent discussion about capital infrastructure and capital investment. The one common thread between the Fianna Fáil Government, the Fine Gael-Labour Government and the Fine Gael-Independents Government is that each substantially reduced capital spending and there has only recently been an increase in capital spending. That increase is to be welcomed.

Our economy and society face massive challenges from Brexit and US tax plans. The potentially serious impact of the Trump tax plan has not been discussed in the House. It could have a particularly dramatic impact if the border adjustment tax is put in place. It is a matter of concern that several of the largest foreign direct investment, FDI, companies located in Ireland, which pay a substantial portion of the corporation tax income that the State receives, are supporting, arguing and lobbying for the border adjustment tax.

That can only have a negative impact on Ireland in terms of our taxation receipts and employment opportunities. That risk needs to be debated and teased out a little more in the House to deal with how we can mitigate such a position if it were to happen.

I recognise there are positive aspects to the statement. The net debt ratio is falling even outside the distortion of last year's growth in the economy. The economy itself is growing, unemployment is falling and bond yields remain low. We have caught a lucky wind in some regards but those facts are welcome nonetheless. However, the entire story of an economy or a society is not just told through economic statistics. There were 357 people on trollies or crammed into wards earlier this week; 2,777 children were in emergency accommodation in the second quarter; 91,600 households were on local authority waiting lists; and there were 484,346 number of people on hospital lists with more than 51,000 waiting for more than 18 months. In a country our size, those figures are not reflective of a wealthy, prosperous society.

The reasons I outline these figures is that we need, as a House, to address these demands in the upcoming budget, yet the Government is wedded to the idea that we have to use one third of the available fiscal space for tax cuts. I do not know who presents to the Minister's constituency office or, indeed, to Fianna Fáil constituency offices and who dictates this policy in the confidence and supply agreement but nobody is coming to my offices to tell me that they want income tax cuts. My offices are crammed with people telling me that they cannot get a hospital appointment, they are under severe pressure because of mortgage distress, they cannot get social housing, the cost of education is crippling them, particularly as they approach the autumn, or they want to set up businesses in rural Ireland but they cannot because the mobile telephone network is not even up to standard, never mind the fact that there is no broadband. These are the concerns I hear about all the time. Perhaps people are queuing up to tell the Minister that they want a tax cut but that is not reflective of society. I believe there is a decency in the Irish people and they want the State to address the trolley and housing and homelessness crises.

Sinn Féin is clear, therefore, that there is no space whatsoever for net tax cuts in the upcoming budget. We need to examine how we can increase the amount that can be invested in the areas I mentioned, including in our health system and our infrastructure. They are ways that can be done through discretionary measures, which I will outline in our alternative costed budget. I hope all parties will do this. I single out Fianna Fáil in this regard because last year the party did not produce an alternative budget. It is easy for the party to stand in opposition and say it wants investment in this and that and wants the housing and health crises sorted out and so on by tabling Private Members' motions, but it has put its money on paper and say what it would do. Sinn Féin has stood apart from some parties by outlining what we would do in government on paper and I hope other parties will do the same. Betting duty could be increased and the help-to-buy scheme, which has had nothing but a negative consequence for house prices, could be scrapped. That would increase the fiscal space by €40 million. The Minister could introduce a sugar tax. All these measures combined would bring hundreds of million of euro into play, which could be used to invest in society.

Nothing illustrates the way the Government is making up policy on the hoof better than its U-turn on the USC. I welcome the fact that the Government has decided not to abolish the charge. I would like to hear from Fianna Fáil that it will abandon its proposal to abolish 90% of the USC and from the Labour Party, which plans something similar.

Up until now, we have not heard from those parties that they are turning their backs on these proposals. None of them, which would have taken between €3 billion and €4 billion out of the economy, was realistic. There were populist nonsense that could never have been delivered. Sinn Féin took a risk in the general election campaign when we told people we would not cut their taxes because we believed we needed the money to invest in the pressure points in our society. I welcome the Government's U-turn but how it happened is an area of concern. We have the programme for Government and then we have what the Taoiseach said to help him get elected. He told us that he would not abolish the USC, that there would be a new debt-to-GDP target, that he would merge USC with PRSI, and the rainy day fund would not be established. Is economic policy, therefore, being developed on the back of the Fine Gael leadership contest? It seems that is how many of these U-turns have come about.

The rainy day fund is not a good idea at this point in time. We need to get to an Exchequer surplus, which would mean a contingency. Tell the people on hospital trolleys this morning that it is not raining; it is pouring and it has been pouring on their heads for many months and, indeed, years. Tell the families who are raising their families in hotel rooms that it is not raining; of course, it is. Tell people who are trying to get out of rental accommodation and on to the property ladder by purchasing their first house but who cannot do so because there is a lack of supply that it is not raining. God help this country if we face an economic downturn and the Government has not addressed the crises in housing and health. If we have to cut expenditure at some point in the future without having addressed these crises, we will be in no shape to do so. Given the finances available, it must be ensured every resource is invested in those areas to make sure our country is in a robust position to face any challenges that we meet in the future.

I also welcome the opportunity to contribute to the debate on what is now the summer economic statement. Members will recall that this originally was the spring economic statement. In government, Deputy Noonan and I determined we should have a spring economic statement to change the way the budget was done. The idea was that we would put all the economic data from the spring on the table in April in advance of the national economic dialogue, which we also established, in order that all the economic players - politicians, employers, the trade union movement, farmers, and social actors - would be able to debate real expenditure and what was available with real choices. It was to be paralleled with the comprehensive reviews of expenditure. The Minister will recall that we conducted two of those during our time in government. This statement would address the total fiscal space, the options to increase that by either additional taxation or reduced expenditure, rebalancing expenditure within it and, as the new Taoiseach said, to have a look not only at the margins but at the totality of expenditure because the notion that what we spend every cent on now is taken for granted and all we are talking about is the marginal additionality should not be the way. That sort of open debate was to happen and it was the centrepiece of new politics.

I went on the Dáil reform committee and the first and most important issue, championed by Fianna Fáil, was that we would do the budget in a different way. We were to have a budget oversight committee and budget oversight office to robustly test and cost proposals from individual parties or Members and to give real capacity to the House to analyse expenditure profiles from the Departments of Public Expenditure and Reform and Finance because, for many people, these tables are difficult and impenetrable, and I spent five years going through them.

As I was advised on my first day preparing a budget, the sums only have to add up on the day they are presented. By definition, they will not add up the day before or the day after because one is on a moving field. They only have to be right and perfectly accurate on the day they are published.

To put it bluntly, however, all of this new politics has come to nought. We had the national economic dialogue in a vacuum. We are now back to the old way of doing things, where everybody has a wish list about what they would like to do as opposed to having a framework in which we should operate this year in this budget or having an expenditure review to show the profile expenditure in every area and what are the real policy choices we want to make to do that. It really is disappointing that we are not having a real debate on real options. For all the pretence of it, we are actually doing things the old way.

The Holy Grail from the start of the economic crisis was to reduce our debt and annual deficit. We could not have a deficit greater than 3% of gross domestic product, GDP, and we had to reduce our national debt to 60% of GDP. We worked might and main to achieve all of that. When there was a distortion in GDP last year by the onshoring of corporate taxes and profits and because it suddenly became an advantage to us, that Holy Grail, that unmovable target, was no longer the relevant target. If there was an advantage to the State and the taxpayer, suddenly that was not to be seized upon because somehow it was a distortion. The collapse was not a distortion, but this was.

If one looks at how we tackle debt, from 1980 to 2016, the average level of debt was 72% of GDP. How was the historical low debt, prior to the economic collapse, of 22% of GDP achieved? It was not achieved by paying off the debt but by growing the economy, meaning the debt was actually much less significant. Most debt is never paid off but rolled over. Its impact is lessened by growing an economy and, therefore, the actual cost of the debt is reduced while the impact of the interest rates is minuscule. If one looks at developed economies and their level of debt, our actual debt - some would say it was falsified last year because of an inflated GDP - is 75% of GDP. The average rate of debt from 1980 was 73%. We really do have to have a better sort of argument about dealing with these issues.

As the Minister knows, I became nerdy about reading tables over the past several years. In Table 2, impact of budget 2017 on available fiscal space, it states in bold that it relates to the remaining nominal resources for 2018. The Departments of Public Expenditure and Reform, and Finance are telling us these are the available resources for us to determine as a democratic assembly next year. The table states we have €140 million to increase current expenditure, €180 million to increase capital expenditure and €220 million to reduce taxes, giving us a total fiscal space of €530 million. The Minister knows that is not true. He profiled additional current expenditure of €140 million when he knows the extension of the Lansdowne Road agreement alone will cost an additional €180 million. Accordingly, all the current expenditure he profiled, plus another €40 million on top of that, will have to be found before we make any decisions.

I know, for example, we spent an additional €920 million this year on health. The average for the past several years has been €500 million. The Minister, however, has not allocated anything to that. Is the assumption that there should be nothing additional for the health budget? Are there to be no additional social welfare payments next year? Of course, they will happen because, like last year, between now and our debate on these real facts and the presentation of the budget, the fiscal space will increase. Last year the spring or the summer economic statement - I get confused with the seasons - also suggested a fiscal space which we debated here. Between then and the presentation of the budget, the fiscal space had grown by €750 million, €500 million prior to the budget and another €250 million in the days leading up to the budget. The reality is that we do not have meaningful discussions of the true facts.

I am a passionate believer that we should spend more on public services now. We cannot afford the sort of €220 million the Government is allocating in tax reductions. That is not possible but we can debate those when we see the actual figures. I would be happy to debate the Labour Party’s plans on the universal social charge. We did not shout about it too much as it was a no-cost measure because we were clawing back at the top what we were giving to the bottom. The net cost was in the order of €70 million in our budget package. We did not trumpet that because it looked like a threadbare measure and we had increased other taxes to a greater degree. The overall Labour Party platform is not to reduce taxes but to expend on public expenditure.

These are the issues we need to debate in an open fashion in this Chamber. We must fight, not on a point-scoring basis, but on the basis that these are the options open to us in real terms. We cannot argue with tables that are demonstrably misleading because the Minister does not have €140 million of non-allocated current expenditure available. He can play a game of suggesting that the €180 million for the Lansdowne Road agreement extension has not been voted yet, meaning it is not a real call. No one budgets on that basis. We have an expectation - in the Minister’s case, a real hope - that the Lansdowne Road agreement extension will be supported. It will cost €180 million and we will have to provide for it if we are going to look at what else is at our disposal to do this work. I look forward to real and meaningful debates in the future rather than ten-minute statements on, to put it bluntly, an incomplete and inaccurate document.

I wish to share time with Deputy Barry.

Is that agreed? Agreed.

In the face of the worst housing and homelessness crisis in the history of the State, an absolute disaster in the public health service, a chronically under-resourced education system and a crisis in our infrastructure on a whole range of levels, this economic statement is pathetic. It does not even get close to providing the resources and the investment necessary to deal with the dire problems our society and economy are facing.

In the name of economic prudence and stability, the Minister, and Fianna Fáil before him, sacrificed the people. The human and social hardship of that is well known in homelessness, poverty, deprivation, people waiting years in pain for vital operations, as well as children with special needs not being able to get assessments, a crisis that rolls on even when they have passed the legal requirement to have those assessments made. At all sorts of levels, human beings are suffering.

Even in the Minister's own narrow terms of economics, the chickens are coming home to roost, however. The social pain and sacrifice that the Minister inflicted on human beings are causing even the Government a major economic problem.

The Government cannot get the workers to stay in the country to employ them in the health service, even though it is trying to recruit them, because it slashed their pay and because it cannot provide an affordable roof over their heads. The Government cannot provide for the housing needs of citizens now, and there is no prospect of it being able to do so in the future with the level of investment going into housing.

The chickens will come home to roost in education when the quality of our education is being degraded by a lack of investment and the high pupil-teacher ratio. There is also the wider infrastructure of public transport, broadband and renewable energy resources that could reduce the cost of energy in this country. Against this background, the famous fiscal space of €500 million is pathetic. It just does not go anywhere near what is needed. This means all those crises that are not just a social problem but an economic problem are going to get worse and the Government will be in serious trouble in a few years, as if it is not bad enough for large numbers of citizens as we speak.

The Minister will respond to all this by saying it is easy to criticise, but what is the alternative, we do not have the money and this is the best we can do. We seriously need to start having an honest debate about this. The elephant in the room of the Irish economic story is that during all of those years when human beings were suffering, profits went through the roof.

Through the roof.

This is the story that is not being told. They went through the roof to astonishing levels. In 2011, gross trading profits were €73 billion. Does the Minister know what they were in 2015, according to latest figures from Revenue? They were €144 billion. Is that not extraordinary? How much tax was paid on that €144 billion in 2015? It was €6 billion on €144 billion pre-tax profit, before all of the allowances, deductions and loopholes that allow them to write down their tax liability, including managerial expenses and research and development tax credits, so they end up paying nothing. In the case of the banks, it was literally nothing. In the case of the vulture funds that gobbled up all the property the Government gave to them, it was literally nothing. They pay 5% and not 12% or 12.5% tax. What about the 1,330 individuals in this country who have more than €20 million to €50 million each, which jumped 6.4% last year? The Government will not talk about taxing them or financial transactions. What about €6 billion in debt repayments we will make this year, which add up to 14% of Government revenue? These are the elephants in the room. If the Minister tapped these resources we would have the money to deal with the social crisis and the economic crisis being faced by the State.

The points raised by Deputy Boyd Barrett are entirely right. It is a con job to state this is the fiscal space and we have €500 million for next year. The eyes are diverted over to this and it is designed in order that people will not see on the other side of the room the potential €13 billion to €19 billion from Apple and other sources of wealth the Deputy has identified. The failure to tax wealth in this country means that next year, according to this statement, Ireland will have the lowest public spend as a percentage of GDP in all the European Union. We have a total of 26% for this State, with an EU average of 44%. If it was 44% in this State, on the basis of taxing wealth, there would be an extra €53 billion. This is the gap between Ireland and the European average as a result of the policies pursued by the Government.

There is another con trick in the Minister's speech. He spoke about long-term capital investment. How many times is it mentioned? What about capital investment for next year? If we take gross fixed capital formation, the extra capital spend next year will be €190 million. Does the Minister know what he can get for €190 million? He can get 1,000 houses. I listened to the Taoiseach in his acceptance speech in the Dáil three weeks ago speak about taking an initiative to build more local authority houses. The Government is setting aside enough for 1,000 houses even if it spends on nothing else. If he contrasts this with the report we had from NUI Maynooth during the week, which predicted the housing crisis has not even peaked in this country, the Minister will see how inadequate and pathetic these proposals are.

I will make two specific points on the questions of privatisation and water charge refunds. On the question of privatisation, these policies are a recipe for privatisation on a big scale. At the weekend, the Minister of State with responsibility for older people, Deputy Jim Daly, told The Sunday Business Post that people should pay for home help if they can afford it. He said many people would be quite happy to make a contribution to the scheme. Of course, the Minister of State ignored that people already make a contribution to the scheme. It is called the taxes they paid during the course of their working lives. Everyone knows if a threshold is set and people above that are asked to pay for home help services, that threshold can and will be lowered over time, and more people will come into the net. Private home help companies have a strong foothold in the State, not just under Fine Gael-led Governments but also under Fianna Fáil-led Governments. They are in it for the money and the maximum profit. If the Government starts charging for home help services, it will be a gateway to upping the ante in a serious way for the privatisation of home help services in this country. There is €375 million a year invested in it and 4,000 on the waiting lists. The way to clear the waiting lists is to increase the public spend. It is a medium to long-term saving and far cheaper than having people in nursing homes.

On the question of water charges and refunds, where is the water services Bill? We were promised the water services Bill before the summer. The Bill was meant to abolish water charges and it was meant to go through the House by the summer period, but it has been kicked back to the autumn. Why is this? Is it because of the spat between Fianna Fáil and Fine Gael over the appointment of the judge several weeks ago, and they do not want any more spats trying to put the thing to bed? Where is the refund for the people who paid, in many cases under duress? Where is the refund for them in the budget this year? It is an interesting point that the people who led the campaign of mass non-payment, and who have secured a de facto amnesty for those who did not pay, are the people in the House now pushing the hardest for those who paid under duress to get their refunds.

Tá cúpla rud le rá agam sa díospóireacht seo. I notice some of the terms and the phrases used in the summer economic statement include that the Irish economy is growing at a healthy pace, an economic recovery, raising living standards and that the public finances are in better shape. All this can be acknowledged, provided what is in the speech matches the reality in our constituencies, regardless of whether they are urban or rural. All too often, the replies to parliamentary questions will give the theory of what is supposed to be there, but the reality does not match. This is where the difficulty lies between officialdom and real lives. I hope the phrases translate into a better life for people.

The economic statement also acknowledges significant sacrifices were made by Irish people, but we all know the sacrifices were not proportionate and sections of society were not unduly aware there was a recession going on while other sections suffered considerably. We know the effects of the budget cuts certainly on parts of our constituencies. When the Minister said in his statement he wants to spread the fruits of recovery more widely, I hope it will be a reality and not just a paper phrase.

It is disappointing that even though a commitment was made on a budgetary office, it has not realised reality just yet. There had been a plan for the Oireachtas committees to have more of an impact on the budget for Departments, but we have not seen this yet. There is also the need, which some of us come back to year after year, for equality proofing and social impact analysis of decisions before their implementation.

Those three factors - the budgetary office, greater involvement by committees and equality proofing - would make a real difference.

We know that housing supply does not match demand and there is over-reliance on the private rental sector. We hear so much about what will happen, what will be built and what vacant sites will be brought back into use but we see the impact of the lack of social and affordable housing. While I acknowledge there is some movement, with individuals and families coming off the housing list, as they are coming off it there are others going on. Some of those coming on are pushing those already on the list further down. We are seeing a great level of private house building. There is one new development on the north side in respect of which there seems to be no problem selling four-bedroom houses for €750,000.

As the Minister knows, we see how quickly student accommodation is being built, especially in Dublin. We do not witness the same urgency and speed when it comes to social accommodation, however. Students need the accommodation for perhaps eight months of the year so during the remaining four months there is massive profit-making potential, be it through Airbnb or other types of accommodation for those coming to Dublin or other cities for concerts, conventions and sports events.

One of the groups most affected, which is further down the pecking order on the housing list, comprises single individuals, particularly men. I do not understand why, with all the student accommodation, a small number of units could not have been included for those single individuals.

The co-operative housing scheme recently opened in Ballymun was extremely positive. I recognise the kind of work that Habitat for Humanity does with couples and families whereby they take over housing in need of repair and work together to bring it back into use.

I read some of the task force report on equality in Ireland. It highlights disturbing trends. It considers the underlying distribution of income. It stated it was imperative that there be no further erosion in real terms of middle-income earners' salaries and wages and that low incomes be raised to the level of a living wage. The statistics show there is a relatively high proportion of those at work on low earnings. I was struck by the quotation, "[I]f we continue on the current path of maintaining a low tax regime, of subsidising low pay, and landlords and developers to provide homes via the market, we are sowing the seeds of ever deeper disenchantment with our political system [and exacerbating inequality]".

I acknowledge the uncertainty associated with what lies ahead, particularly in regard to Brexit. The committees have had much discussion on this and heard many presentations. One of the committees of which I am a member, that on the Good Friday Agreement, launched its own report. It was very obvious that the one certainty is that there is uncertainty over Brexit. A rainy day fund certainly makes sense, particularly after the excesses of the Celtic tiger years, which involved a philosophy of spend, spend, spend.

I must issue a cautionary note regarding where Ireland could lose millions of euro it cannot afford to lose and which the Minister needs in the budget. There seems to be a lack of awareness over aspects of CETA, particularly regarding the investor clauses. We are sleepwalking into accepting all aspects of CETA, which could prove really costly in terms of jobs, small and medium enterprises, and the beef and dairy industries. It would make us vulnerable to multinational companies and corporations suing Ireland for imagined losses of profits. Let me give some examples. In Bolivia, there were attempts by a particular company to privatise water. Between NGOs, civil society and international campaigns, pressure was put on that company not to sue the government, so the case did not proceed. If it had proceeded and the company had won - there was every likelihood it would have - it would have cost the Bolivian Government €50 million. The amount the company had put in initially was €1 million. The facts are evident. From the 1960s until 2000, there were ten investor court cases, but from 2001 to 2015, there were 700 cases. What I describe is a commonly used tool for corporations and multinationals and we do not seem to be alarmed by this. Ecuador faced several cases like this. It carried out an audit, a risk analysis of exposure to ISDS. Its conclusion was that the perceived need for those clauses to attract investors has been proven a myth. South Africa had a similar process and found no correlation between attracting investment and having these clauses. In a recent US-Australia trade agreement, there was no ISDS clause. Those audits did find that the ISDS undermines national development. Therefore, if we ratify, we are exposing Ireland, through these clauses, to being sued by multinationals, with the possibility of losing those millions the Minister has been outlining he will be spending on various services. I ask him to consider a risk analysis of what this could mean for us in the various Departments so we know what we are doing. I very much agree with investment and trade but not with these clauses being included.

Instead of spreading resources too thinly, budgets should make a real difference for those suffering the most inequality. These are the people with the disability, mental or physical, or both. I note there is to be a special committee to form a joint committee on the future of mental health care that is going to agree on a single long-term vision for mental health care. It is opportune, therefore, that we examine health care. There is an opportunity in the budget to address the inequality being experienced by people with a disability. Budget 2018 should really address the poverty and exclusion experienced by those in question so they can participate and contribute fully in society. That would complement the work of the new committee. It is ironic that, outside the Dáil today, there is to be a protest by people with disabilities. They are highlighting the series of broken promises, not just by this Government but also by others. They feel the HSE has too much power over their lives. They are still waiting for developments such as the personalised budget.

Corporation tax features in the Minister's statement and also the commitment to the headline rate of 12.5%. What is the effective rate? The Minister made a speech yesterday about base erosion and profit shifting and country-by-country reporting, but we still do not support public country-by-country reporting.

Economists should do philosophy at the same time. The philosophy is about the kind of society in which we want to live, in addition to the values and principles. I am always struck by the quotation from Nelson Mandela to the effect that vision with action is required to bring about real change.

If we introduce tax cuts and reduce the USC in this upcoming budget, we will fail to deliver on legacy service deficits. I am referring to the health service, in particular. The economy is growing, yet our health service is deteriorating. How can that be? The lack of capacity in our hospitals and staffing and infrastructural deficits are now leading to institutional bottlenecks in our emergency departments, as demonstrated by lengthening trolley queues, affecting several hundred patients every day, and the now-predictable seasonal peaks in trolley queues. Waiting lists for essential planned care are now also institutionalised and are worsening week on week. Waiting times for specialist opinions and diagnostic and screening procedures result in a failure to provide patients with a service in a timely fashion. Transitional funding to stimulate health reform is not obvious in any statement from the Government.

These deficits in our health service have now reached such proportions as to be an abuse of our patients and an infringement of their right to a proper functioning health service. I urge the Government to commit to a root-and-branch reform programme of our health service. I do not believe giving piecemeal funding to our fragmented health service is the best way to proceed. What is needed is to develop a new governance framework for our health service in which efficiency and accountability are paramount. This requires political buy-in and the Government to commit publicly to a health reform programme. It requires legislative change, which demands accountability, answerability, efficiency and the taking of responsibility for good governance in our health service. I refer to both managerial and clinical governance.

Integration of services underpinned by a reform programme will bring savings and, most particularly, better outcomes for patients, which, after all, is what the health service seeks to achieve. I see no evidence is this summer economic statement that indicates that a health service reform funding programme will be instituted. The Sláintecare reform programme gives a blueprint for essential health service reform and requires an urgent commitment from this Government.

To give an example, I recently met a surgeon who was appointed. She has no beds, theatre space or staff. She has come back to Ireland to commit to the health service, yet she is not given the infrastructure to carry out her job. She is literally twiddling her thumbs.

The improvements we hope to get in the budget are very important because many people have been left behind for years. The big imponderable is Brexit and how adversely it will affect our country and the people who work and try to survive here, especially those in agriculture. I heard some commentator this morning say that many English people believe the UK should not leave if it does not get a deal. Maybe they are finally waking up and it has taken them a long time to wake up. I cannot see that they are going to get a great deal because they are leaving the European Union.

Infrastructure projects to progress our country have been left behind. The county I represent has been left behind long enough in regard to broadband and the roads into Kerry, such as the Macroom bypass and the Adare bypass, as well as all the roads going to rural homes within the county. Without putting any bones in it, I have to say the people in rural Kerry are entitled to a good road to their door as well as the people in Dublin 4.

We have been hearing different vibes in regard to tax and what improvement people can expect in their incomes due to tax reductions. The Taoiseach said he is in favour of helping people in the middle income bracket, but then we hear he does not have the fiscal space to do it. He should make up his mind. It is wrong to give people false hope, but that appears to be what has happened. Middle income earners are put to the pin of their collar to keep going. The bracket at which they start paying 52% tax needs to be raised from €33,000 to over €40,000, given it has not been raised in years. What people buy is costing more and they are finding it harder to live and to pay for the services they get, and they sometimes pay for services they do not get at all.

The fair deal is a lousy deal for farmers and I hope the Minister will address this in the budget. In fairness, many Deputies saw fit to support the Rural Independent Group on this. That anomaly will have to be addressed in the budget.

With regard to home help, there is an anomaly in that the same person can get into a nursing home and have that covered by the fair deal but will not get any extra home help. On the issue of Kerry Co-op shares, the Revenue Commissioners are failing to meet their obligations in regard to what they promised. The HSE does not appear to be accountable. There are too many chiefs and not enough Indians in that we do not have enough front-line staff.

I welcome the opportunity to speak. It is a new phenomenon of recent years that we have these summer economic statements. With growth projections of 4.3%, we are talking about a huge labour market that has increased in the past 18 quarters. However, what kind of jobs are they? They are not all good jobs and many are zero-hour contracts. I am not a mad, raving trade unionist but I know the jobs are not proper jobs. People are being forced to work in situations that are not very desirable and with no certainty. They cannot borrow or have certainty for their families.

With regard to rural Ireland, the Government got enough of it in the last election with its "Keep the recovery going". There was no recovery and the Government found that out, but it still has not learned. The Minister spoke about fiscal space, another term that annoys people and drives them wild. We were expecting a good bit of money but it is now down to a couple of hundred million.

The waste that is going on in this country is what should be tackled first. The Minister should not bother coming in here with economic statements, whether it is spring, winter or summer, or April Fool's Day either. The waste going on in the public system is unbelievable. The hospitals issue has been addressed by Deputy Harty, who knows about this. The Government was boasting about €900 million extra for last year. For what? It was for worse results, year on year. Several Ministers have failed to tackle it. That is one area but, right across the public service, there is massive overrun on projects. The Government is telling us the children's hospital will probably cost €2 billion before it is built, even though it is in the wrong place, as we all know. It is just left there. I put in complaints and have written to the Committee of Public Accounts about the waste in Cashel hospital, where the spend increased from €12.2 million to €21 million or €22 million, but I have not heard anything back yet. I wrote to the HSE and I got back waffle. There is no one with teeth watching these organisations. The HSE is the worst of them all but there are more runners-up in that race and they have their hands around the handlebars of the system. They are not accountable to this House or to anyone else. We need to tackle that to allow the country to survive.

If we lessened the USC and allowed the people to spend money in local shops to give the economy a bit of stimulation, those people would feel better. It is a crippler. There were so many expectations created by the Taoiseach and the Government but nothing happened and we now know that nothing is going to happen. That is very hurtful and mean.

While I might criticise the public service, there are many good public servants, some of whom we met during the week. Retired public servants have been treated shabbily in the past ten years. No union is looking after them. Once they are retired, they are forgotten about. It is a very unjust society.

We want a university for the south east. We are not looking with the béal bocht. We want a proper spatial strategy and we want services in rural Ireland, the same as they have elsewhere in the country. We are not jealous or envious of what they have but we want fair play.

Community people are the backbone of this country. I am talking about those providing home help, meals on wheels and all those services. We must allow them some bit of dignity to work. Above all, I am talking about disabled people, who have to come here again today to sit outside the Dáil while the motorised transport grant has been put off repeatedly. The Taoiseach told me last week that primary legislation was needed but the Government needed no primary legislation to cut it, when it had been in place for a decade or more until it was cut four or five years ago. We have been raising this issue repeatedly in the House but we are told it needs primary legislation. The Government's primary job is to govern, to be fair to the people, to listen to the people and to deliver for all people, not the elite.

Any objective assessment of where Ireland is at the moment would show a country and an economy which is struggling badly and is under very severe pressures that arise due to the fact our services are so severely underfunded and our public infrastructure is so wholly inadequate. Given that situation, and we in this House are all too aware of those pressures as we are dealing with them with our constituents every day, it is very hard to see how on earth the Government could adopt the kind of fiscal stance that was outlined in yesterday's statement. It is very hard not to come to the conclusion that this stance is seriously misguided. Sometimes one has to wonder if the Minister and the Government are living on the same planet as the rest of us and the constituents we are supposed to serve.

Given the level of unmet need, one would have to ask how on earth the Minister can contemplate the idea of tax cutting. We got that clear message last year during the general election, when people were very clear they were not going to be fooled by promises of tax cuts. They did not want tax cuts. They wanted politicians to sort out the housing crisis and to deal with the dysfunctional health service and all the other unmet needs in society.

People have moved beyond the Minister's position and they do not buy the empty promises he makes.

Earlier, he stated his aim was that the fruits of economic recovery would be spread as evenly as possible. Why does the Minister not tell us what he means by this? His actions, and those of the previous Government, do not suggest he is serious about that as an objective. He has not said anything other than that phrase today or explained what he means by this. How would he give effect to that? He has not provided any figures on the level of poverty and inequality. He has not set out an anti-poverty strategy or targets to ensure that recovery is spread evenly. Is this empty rhetoric or does the Minister mean it? If he does, will he explain how he will achieve this because his actions to date do not indicate that nor does the stance he set out in yesterday's statement indicate that he is serious?

If the Minister is serious, the obvious conclusion is that whatever limited resources are available would be invested in public services because that is how one ensures that there is fairness. We need to get to a point where there is a clear social contract where the understanding is that people pay their taxes, at a fair level, and in return they get good quality public services. That is the kind of social contract that exists in most European countries, particularly in northern European countries. A cohesive society can exist where one pays one's taxes, based on ability to pay and in return, one gets good quality public services. That makes sense. The tax-cutting agenda peddled by the previous Government and continues to be peddled by the current Government is short-sighted, dishonest and inequitable. Given the very narrow fiscal space currently available, that €500 million should be invested in good public services in its entirety. There is no space for tax cutting. Because that space is so narrow and the kind of uncertainties the country faces because of Brexit, the prudent thing to do is to safeguard the current tax base and to ensure there is some stability in that for the future. Taking that kind of approach and tackling the social and economic pressures is not only fair and ensures a more cohesive society but also makes sound economic sense. Our failure to do that has resulted in huge upward pressure on wages and that is a vicious cycle. We do not tackle the underlying problems, we do not provide good quality public services, we allow the cost of living to soar and that puts pressure on wages.

We need to take a more holistic approach to this. It has to be equitable, honest and fair and what the Minister laid out in yesterday's statement will not achieve that.

We agree with a number of the things in the Minister's summer economic statement and his speech. We need to reduce public indebtedness to protect against future risks, to make sure that we maintain a capability for counter-cyclical economic policies and to make sure we increase investment in capital, as we agree there are infrastructure backlogs and gaps.

Where we differ is we believe we need to maintain the current tax level. If the Minister wishes to reduce certain taxes because for some reason they cause some dysfunctionality, there may be scope to increase tax elsewhere in order that there is no net reduction in tax, giving us greater spending power. We would take that different approach.

The biggest difference between us is I have no sense of the strategy behind the document. I understand the economic strategy but economics is a narrow prism by which to look at how we develop our society. I agree with the Minister that we should not merely concentrate on fiscal space. He suggested we should look at the fiscal stance instead but when I looked at what that means, he followed up by stating, in other words, we must "ensure that budgetary policy is appropriate in supporting sound macroeconomic conditions and helping our economy grow in the long run". That is not an adequate strategy. Sustainable development is development that is sustained. Growth strategy is everything. From a Green perspective the idea that it is all about economic growth is not a strategy.

This has been a problem for 30 or 40 years. Our public service has atrophied where it comes to thinking strategically. It has bought into a market ideology to such an extent that the public service has become lazy in the sense that whatever it does, it does not make strategic decisions, it is only there to set up the economic conditions to allow the market to do its job. There was an example on this here some nights ago when the Minister, Deputy Naughten, responded to our waste initiative proposal. There was a line in his statement saying that whatever else, he did not want to create another PPARS or e-voting machine. In other words, there is a public service mantra that whatever one does, one must not take a risk. One should not take a strategic risk in investment, particularly if it is digital or clean energy or new technology where one is not certain it will work. That is a mistake. In the world outside, an industrial, digital, clean energy, transport revolution is taking place. If our public service does not believe in that and has no sense of where we place ourselves in that regard, our fiscal stance will be wrong. We need to take a stance in evolving developments. Another example of this inability by the public service, and the Departments of Public Expenditure and Reform and Finance in particular, is the metro project. Yesterday, the Minister was quizzed on the analysis on that. Our State had a complete inability to do the proper economic analysis of public transport projects. They could not understand the wider developmental benefit of a proper public transport system in this city or the real cost of not having that. There is just mindless cost-benefit analysis where the Department of Finance measure things on the basis that a road project is good because point A to point B can save X amount of minutes and therefore that makes economic sense. The officials think they have done their job - no one gets fired for hiring IBM - the box is ticked and away they go. There is no thinking or strategy behind it. When one is on public transport, one can work at the same time but no one is measuring that benefit.

The environment does not matter. It is not mentioned once in the economic statement, as though it is not happening or there is no environmental context to what we must do. The Green Party stance would be to invest in electric vehicles, in the retrofitting of buildings, in greenways not motorways, in our wastewater systems in order that we are not swimming in sewage, which is happening in Dublin at present, and to invest in forestry and in housing. We need strategy. The Minister needs to take a stance on the national planning framework. We need housing and we need it close to the centres of towns and cities. The Minister needs to come out with that type of stance in the spending review's priorities.

At the very end, the Minister mentions sectoral issues but there is no mention whatever in this review of any strategic sense as to where we are going, which are the big strategic issues. How can we separate economics from a vision of society and our country, which is what is in this document? The Minister has it in his head but should put it down on paper and into his speeches and should not allow the Department to narrow us down to mere economic robots, which does not give us any vision of where we are going as a country. We need fiscal responsibility but we need more than that, we need a vision of where this country is going to go.

I will begin by complimenting Deputy Maureen O'Sullivan. Her speech was the best this morning by a country mile.

An incredible number of opinions were expressed this morning as though opinion was fact. While I do not want to spend too much time on that, I will touch on some of them. The redistribution of wealth operates via taxation through the Government. During the worst periods of the recession, the State was collecting €11 billion in income tax while it was redistributing, through the social protection budget, €21 billion. There is not another jurisdiction that gave out almost twice as much as income tax to people who required redistribution.

We never hear anyone talking about that fact. People ignore it. The major readjustment between the recession and now has been in respect of income tax. Some €11 billion was collected at the lowest point in, I believe, 2011. The projected figure for 2017 is €20.5 billion. If people want to know why the working middle, the people who go to work every day and pay high taxes, should be given some benefit of a reduction - and the reductions have been modest - that is why. We have doubled the take in respect of income tax. The sector I represent is the financial services sector. Every day, I meet representatives from companies that we are trying to attract here to employ people. One of the first issues that is raised is the very high rate of tax. Deputy Danny Healy-Rae referred to how quickly-----

We do not have high rates of tax. The Minister of State should stop misleading people.

-----one gets to the high rate of tax, the marginal rate of 52%, when ones earns €33,800. To put that in context, the average industrial wage is €36,000. This is one of the very few jurisdictions in which one is able to get to 52%, the higher rate of tax, before getting to the average industrial wage.

On the national debt, some of the things that were said earlier are incredible. The national debt is approximately €200 billion. When I entered this House a decade ago - at the same time as Deputy Calleary - it was between €44 billion and €47 billion. That was the debt. Some €30 billion was added because of what happened with the banks. The remainder relates to running the deficit that we are talking about in order to ensure that people would have social protection payments, old age pensions, children's allowance and unemployment benefits and allowances. The national debt has increased by approximately €140 billion - €14 billion a year for ten years - to ensure that people had those payments. That is what has happened and that is why it was done.

I want to touch on a matter to which Deputy Boyd Barrett referred, namely, gross profits. Nobody pays tax on gross profits. People pay tax on net profits. That was a dishonest thing to say regarding gross profits. Without those companies employing people, there would be hundreds of thousands fewer people in the workplace. These people are the reason we have got out of the recession. We have emerged from the downturn in which we found ourselves. It was not a Greek-style downturn, but there would be problems if we had gone down the route that some parties on the left suggested. Deputy Boyd Barrett spoke on local radio with me, going back to the period of the fiscal referendum, and said that defaulting was the way to do it and that it had worked out really well in other countries. Anybody who knows about a country that has defaulted knows that it has not worked out well.

I want to touch on what Deputy Pearse Doherty of Sinn Féin said. His party leader, Deputy Adams, sat in the seat that Deputy Pearse Doherty sat in earlier and stated that defaulting was the way forward. I want to make a point about Sinn Féin. Sinn Féin has never taken a risk in the politics of the Republic of Ireland because it has always determined that it would not go into government. One might criticise Fianna Fáil or Labour or ourselves, but at least we have stepped into government and done what we believe to be the right thing in order to get the country to the right space. It has taken a decade. I have spoken about it before - it is the lost decade. We are going to balance our budget in 2018. We are obliged to do so on foot of the fiscal rules. These are not the European rules that were created by somebody else, but the rules that we voted on in the 2012 fiscal compact referendum that was passed by the people of this country.

There are many other areas I could cover. I think the summer economic statement - or spring economic statement - is good. The old days of one big-bang-wallop of a budget coming and nobody knowing what was going on until budget day have gone. Things are improving and I look forward to the opportunity for the other parties to have their budgets costed.

I want to finish on this. Some people are expressing the view that it is all wrong. It is not all wrong. It is not all right either, and I accept that, but we should not go down the route of saying that everything is wrong with the public sector. It is not. We have the very best public servants and civil servants. We do not have the greatest health service - there are issues there to be resolved, which we are doing the best we can about with the resources that are available.

I welcome the publication of the summer economic statement. I want to thank the Taoiseach for giving me the opportunity to serve in the Department of Finance with the Minister, Deputy Donohoe, and the Minister of State, Deputy D'Arcy. This is the first opportunity I have had to speak in the House since my move.

In fairness to the publication from yesterday, I want to start by referring to some of the remarks that were made earlier about strategy and how it cannot be all about economic growth, the potential growth in the economy and the fiscal space. The reality is that if one wants to have a reformed public sector, invest in public services and, as we all do, have an improved situation for all of our citizens - whose sacrifices have been massive in bringing the country back from the brink and putting us in the space in which we find ourselves just five short years after first going into government - then we need to talk about economic growth. That growth is the key driver of the strategy. As the Minister of State, Deputy D'Arcy, said, not everything is right, but not everything is wrong either. Seven out of ten people who lost their jobs in the biggest crash that this country ever experienced now have the opportunity to get up in the morning and go to work. That is a massive achievement in such a short period and it is on their backs and those of the people who took cuts - and of those who ultimately paid a massive sacrifice in having to leave the country or in losing their jobs - that we are in the position in which we find ourselves today, talking about having an additional €500 million to spend next year and total Government expenditure of €60 billion. These are not insignificant amounts. The Minister, Deputy Paschal Donohoe, has been very clear in asking people to not just look at the incremental increase but at the overall picture and the totality of what it is that we, as a Government, will spend in the forthcoming year.

There is no doubt that there are challenges. Without challenges, there would be no need for a Government. The reality is that, as the country continues to develop and as we are able to put more people back to work and drive down our debt and our deficit, we will be able to invest far more than we are in a position to currently to face those challenges. The first and most important thing that we have to bear in mind is that, while the Government is in a brighter position than it was in 2011, we have to be responsible, fair and realistic. We have to be realistic with people's demands. There are many competing demands. We also have to be compassionate and fair, and we have to recognise that we did not get everything right in the past five years, but we also did not get everything wrong. If we got everything wrong, we would not be in the position that we are in today where unemployment is a fraction of what it was when we first went into government. People now have opportunities of which they can avail.

When we first came here in 2011, little did we think that, within five years, we would be talking about spending needs, capital needs and the need for additional resources across a range of public sector areas. What we were talking about at time was whether this country would survive. It has, on the basis of the commitment that was given, and the contribution that was made primarily by the public in general. The partnership for Government model and the programme for Government outlines a number of priorities that we have as a Government. In the area that I have responsibility for, reform is a huge part of the agenda. This morning, I launched a report on what the Organisation for Economic Co-operation and Development, OECD, makes of what we have done in the context of the reform we have managed to bring about in conjunction with our civil and public sector in recent years. It is remarkable, and many of the achievements go under the radar. One does not get credit for the things one does right, one merely gets criticised for the things one does wrong.

This debate is an opportunity for us to reflect on what our civil and public sector has done in an era of unprecedented economic difficulties and all without a single day of industrial unrest. It is a remarkable achievement for a country to come through what we did with the unity of purpose that we have had, and our civil and public sector needs to be acknowledged for that as well. There is no doubt that the challenges are massive, but we have to be in a space that manages expectations now, both politically and otherwise. The fiscal space, the ceiling caps or whatever on wants to call them that the Minister has outlined are modest. The overall increase is modest relative to the total amount in the budget, but the forecast is much healthier for the years 2019 to 2021, inclusive.

In the context of where we currently stand, we are going to be able to start looking at capital programmes across the country, regional focus and the deficits that exist in many different parts of the civil and public sector. In doing so, we have to ensure - the Minister also said this - that the rainy day fund, while it is not €1 billion, has the extra €500 million, now being put into capital, allocated to wealth generation.

This, in itself, will be a driver of the economy and will allow people with the opportunity, as I have said in the House on several occasions, to have the dignity of being able to get up in the morning, pay a mortgage and put their children to school in their local areas. Those challenges are going to be great.

The national planning framework is coming at a time when we are going to be able to announce a capital programme. It will set the blueprint for the development of Ireland in future. That is critical. It cannot be along the haphazard lines it was, as I have said often. It cannot be a "Late Late Show" approach whereby there is one for everyone in the audience, whether hubs, spokes, wheels, or whatever people are having. That means nothing and no one believes it. We have to ensure whatever is presented by way of a national planning framework and the capital spending plan is realistic and deliverable. The public must be able to see these are the types of initiatives that will ultimately lead to a greater level of wealth generation and that will result in everyone's boat rising incrementally.

As I said and I will say it again, realism is the most important thing at this time. We need to manage expectations and be fair and compassionate. We need to realise there are elements in society that are not where we would like them to be. That is our focus as a Government. It is part of the programme for Government and the confidence and supply arrangement we have with Fianna Fáil. That is key and to the fore.

I wish the Minister well in his new joint custody arrangements involving the Department of Public Expenditure and Reform and the Department of Finance. The Department of Public Expenditure and Reform might get the Minister at weekends - I am unsure. I wish the new ministerial team well. I was listening to their remarks and to the speeches. The intent was good but the reality is so lacking. In reality, the connection between the summer economic statement and our grand macro figures is lacking. In Mayo General Hospital, four weeks of elective surgery will be cancelled, including the last two weeks of July and the first two weeks of August. This is because the hospital does not have enough theatre nurses. It cannot get them. That is the reality in our health service around the system.

It is not necessarily a complete fiscal reality either. The reform programme referenced by the Minister of State, Deputy O'Donovan, is going to have to kick in here. Often, it is work practices and patterns that deter people from coming back and taking up opportunities.

I was listening to Deputy Harty earlier. He referred to the person he met who is going back to take up a consultancy post. Well done to her, but many will not do so. This is not because of tax necessarily but because of the working conditions and practices within the HSE. It needs to be tackled. Many Deputies I have been listening to this morning deal with the HSE. Those in the HSE management think they are unanswerable to us as public representatives and to the Departments of Finance and Public Expenditure and Reform.

There is no sense in us making grandiose announcements like summer economic statements, spending and capital reviews or budget day announcements unless there is monitoring of how it is happening. More than 500 children in Mayo are on a waiting list for occupational therapists. When we have waiting lists going out of control in hospitals throughout the country for all elective surgery, the notions of the grand recovery and a republic of opportunity that the Taoiseach speaks about are alien notions. Will we get evidence of it in this year's budget? It is an alien notion for a person waiting more than two years for his child to see an occupational therapist because there are not enough of them in the system. Moreover, the system is so rigid and lacking in imagination and compassion that it will not move occupational therapists to areas where they are needed. There is no republic of opportunity if a person is waiting for a hip operation or on a waiting list to get into the National Rehabilitation Hospital in Dún Laoghaire.

There is certainly no republic of opportunity for people who cannot access high-speed broadband for their children to do basic education. They cannot work from home. They cannot make the choice to get up early in the morning and work from home. They cannot live in the regions and work for a company based in Dublin because, despite all the money that has been spent, we have been unable to get our heads around how to spend it properly on high-speed broadband.

The Minister is undertaking a spending review at the moment. I am sceptical about it because I am sceptical about the willingness of Departments to say where they are spending it and what they are spending it on. I am even more sceptical about the willingness of the system to measure the impact of that spending.

Earlier, Deputy Mattie McGrath spoke about the level of waste, and he was right. That waste means we are unable to spend it on essential services. It means we cannot make people's lives easier. We cannot use the money we are speaking about here to make an impact on those lives. That waste is tolerated within the system and that will remain the case until we stand up to that waste and stand up to that challenge.

Deputy O'Sullivan has left but she made a point about the independent budget office. I welcome the appointment of Annette Connolly as the head of the independent budget office, as was announced yesterday. I wish her well in her position. However, that office was nobbled from day one. The difficulties, delays and rows over the grade are only a signal of what is to come. The system does not want an independent budget office challenging it. The system does not want an independent budget office equipping Members of this House and the other House with the skills and information we need to challenge where this money is going.

We expect the Minister for Finance and Public Expenditure and Reform in those roles and as a Member of the House to stand up to the system and ensure Annette Connolly is given the resources and powers necessary for the independent budget office to be truly effective, for it truly to do the job we want it to do, for it to be independent and for it to challenge and to ask the system what it is doing with the money allocated to it.

Earlier, the Minister of State, Deputy D'Arcy, spoke about the big bang budget day announcements. We should not be fooled. The system has not changed that much. It is amazing how €200 million can be found between midnight and 1 a.m. on budget night. The big bang budget announcement is a problem. First, we make the announcements. Then, we all have a four or five-day debate, but then we go away back to our work. What we need to do is monitor where that money is going and where it is having the impact. I hope this is what the independent budget office will be about.

My remarks yesterday on the statement were focused on the area of capital. The Minister will know from parliamentary questions and committee meetings that I do not believe the Government is getting the capital budgeting system right in any way. We have alternatives in terms of funding. The Government did not necessarily need to reduce the rainy day fund. I welcome the Government's new-found commitment to the rainy day fund. The Government could have gone elsewhere, for example, the European Investment Bank. I welcome the plan to review the Ireland Strategic Investment Fund. However, there needs to be urgency about that.

Where are we with the credit union offer of putting €1 billion on the table for addressing our social housing problem? That is the greatest challenge facing this Republic. One year on from our centenary year, we cannot put a roof over the heads of the citizens of this Republic. They are sleeping on streets, in hubs and in hotels. People are tracking from one side of the city to the other to get their children to school because we cannot provide houses. No amount of spin, glossy documents or big bang announcements will change that. The Government is running away from funding that is put on the table that is not Exchequer funding. We cannot get an answer to why there is no engagement around that. That is why we cannot take the capital plan seriously. That is why we judge the Government on the practicality of it. We cannot rate the Government ambition for capital plans seriously when it is walking away from sources of funding that might be available to it.

We need to wake up and look at what Brexit is going to do to this country, not only in this House but outside in every element of society. I pay tribute to the former Taoiseach, Deputy Kenny, in respect of what he achieved on the Border, but that was achieved on the back of an international agreement that has been in place since 1998 - the Good Friday Agreement. There is still no understanding at EU level of the impact Brexit will have on our economy. Leaving the Border and associated issues aside, I do not hear anything from Brussels to suggest that they understand this is the economy most exposed to the UK leaving. The UK is our biggest trading partner. For the first time since our independence, we are going in a different direction. I do not get a sense that the Government is urgently pursuing or articulating that argument in the corridors in Brussels.

When Mr. Barnier was here some weeks ago, he stood in the Chamber and patted us on the back. He told us we were great boys and girls and that it would be all right on the right, but it will not be all right. People are in business trying to make plans. In two years, we are either going over a cliff or down a very rocky road. One way or the other it is not going to be easy. The same should apply to the country.

To Brexit-proof the country, it means a massive capital investment in the Atlantic corridor, ports such as Rosslare and Dublin, and airports that serve the UK and can be equipped to serve other markets. That is what we need to examine in the capital plan. I acknowledge a review is due imminently but that needs to be a Brexit review, not just an ordinary, tick-the-box capital plan review.

I agree with the Minister of State, Deputy O'Donovan, that the national spatial strategy plan review, which is due, needs to be real, honest and done in a way that delivers quality to the regions for once and for all. The review should involve, not ignore, the regions and it should also recognise the challenges that Dublin city faces. The city centre is booming but there are communities within the city that need opportunities, socially and commercially. The Minister's constituency contains examples of communities that have been forgotten for many years, even in the shadow of so-called economic development. That has been replicated across Dublin and all our cities and these communities need to be included in this review and they need to be given a voice in the national planning framework review.

The Taoiseach is fond of phrases and very fond of spin. He said that he wanted to create "a republic of opportunity". Budget day in October will give us an indication of what that means. In the four to five weeks he has been in office, we have not seen much indication of the reality behind it and there is little indication in this statement of where he is going. The Minister has to deliver on the promise of "a republic of opportunity" in both his roles. That means opportunity for every citizen, including those on waiting lists and children with additional needs against whom our country conspires at every turn in our health, education and social care systems to make difficult lives even more difficult. It is not necessarily about money; it is about a change in how we respond. To date, the Taoiseach has been all socks and no substance. The budget process is the chance to show the substance.

The Deputy has been practising that line for a while.

I learned from the Minister of State.

I welcome all our visitors who are in the Gallery. We always like to see them, particularly the people from Lean ar Aghaidh centre in Roscommon. They are very welcome.

It is incredible that the Minister can spend two entire days talking about a budget that will not happen until 2019. I refer, of course, to his announcement that there will be €1.5 billion for capital investment between 2019 and 2021. He cannot talk about the 2018 budget because both he and his predecessor overspent last year by introducing tax cuts where they were not warranted and spending millions on a housing scheme that did nothing but help fuel prices of houses. My colleague, Deputy Pearse Doherty, raised this repeatedly last year and told the Minister exactly would happen but, as always, Fine Gael went with the tax cuts and grants to developers and speculators and, to nobody’s surprise, that did not work.

In our alternative budget last year Sinn Féin made capital investment front and centre of its plans. We knew that this was the issue that needed to be tackled. Ireland is at a crossroads. We need serious capital investment yet the minority Fine Gael-Independent Alliance Government supported by Fianna Fáil is committed to cuts in taxes and the further privatisation and downgrading of essential services. The current level of public investment is simply too low to provide the housing, services and infrastructure that is desperately needed across the State. The need for public investment has been highlighted by groups and organisations as diverse as IBEC, ESRI, NERI, TASC, the European Commission, the Irish Fiscal Advisory Council and Social Justice Ireland. The Government's capital investment plan puts capital investment at only 1.9% of GNP in 2017. Given almost ten years of underinvestment and unmet demographic pressures, this shockingly low level of capital investment is reckless and unsustainable.

On paper the economy is doing very well. However, behind those figures there are issues that are unique to Ireland. We know from economists who study the performance of the economy that GDP is not a good reflection of where we are as a country. Reading the headline figures in terms of investment, one could form the view that investment in Ireland is increasing but when one gets into the detail in that regard, one discovers that the basis for this is that a small number of multinationals have relocated intellectual property activity into Ireland, which has bumped up the figures. If this activity, which has little impact on economic growth, is stripped out, investment in the country has declined. There is a major problem, in that while some multinational corporations provide much-needed employment here and some tax receipts, this skews the figures in terms of the overall GDP, which also then causes major problems when we are considering how the resources of the economy should be divvied up or, indeed, the sustainability of our debt.

One of the major challenges the country faces is the consequences of almost a decade of under funding of capital infrastructure. We have the second lowest level of capital investment in Europe and that is not acceptable or sustainable. The face of this underinvestment can be seen in our flood defences, our children being educated in prefabs, raw sewage flowing into our rivers and seas and a lack of telephone and broadband coverage. Sinn Féin is the party with a plan for economic recovery not based on fleeting corporation tax receipts or tax breaks for the wealthy but on public investment in our roads, schools, hospitals and workforce. We are committed to building a sustainable economy and an equal society.

I welcome the Minister's economic statement. I cast my mind to 11 February 2010 when I had to step on a aeroplane to go abroad because of the disastrous economic crash that year. That was just seven short years ago. If someone had said to me then that we would be debating a fiscal space of €1.5 billion and an unemployment rate that has reduced to 6.2%, I would have laughed at him or her. Thousands of us were stepping on to aeroplanes at the time and we felt there was no hope. We did not know when we would be able to return. We thought history would repeat itself and we would be another generation that would not get the opportunity to come back. The trickle of returning emigrants began in 2013. The turnaround was extremely quick. It was quicker than anyone envisaged, particularly myself. In 2010, the budget was cut by €4 billion. A number of budgets were introduced and the country was absolutely rudderless. People were on the streets wondering into which bank they would put their savings because they did not know whether they would go bust and what the future would hold. People who were considering emigration did not know where to go. They did not know whether they could obtain a visa, whether they could come back or when they would see their family again. All those pressures were put on people and that was the backdrop at the time.

We have come through those challenges. People have made sacrifices for the betterment of the country. Now we need to drive forward. We need to strike a balance between providing for capital investment and paying down the debt. We do not want to overheat the economy. If too much inflation is generated and interest rates start to rise, the cost of living will come under pressure and our competitiveness will be challenged. We need to maintain our competitiveness to facilitate the private investment that is coming in all the time. Our economy is growing as a result of such investment. We need to put that back into services.

I welcome the Minister's statement on capital investment in roads, infrastructure, education and hospitals. Such investment is warranted and needed. I make no bones about saying that there has been under-investment as a result of the crash. We had to try to balance the books. Ireland developed its capital infrastructure in the 1980s and early 1990s, particularly with money from the EU. We have stalled on that now. Progress has moved on again. We need to catch up. I welcome the statements of the Taoiseach and the Minister in that regard.

There needs to be a focus on sectors such as construction, from which we have shied away in recent years. We need embrace construction as a pillar of the economy but not as the only pillar. This area of the economy needs to kick off again, thereby generating employment in the trades for electricians, carpenters and bricklayers. Houses need to be built. Additional employment is needed in these areas to bring the unemployment rate from its current level of 6.4% or 6.3% to 5% or 4.5%, at which point we will have reached full employment. We are striving to keep jobs coming and to give people employment. We need to make work pay. People need to be incentivised to do a day's work. They need to know that if they work harder, they will earn more. If people are earning more, they will be able to spend more and put more money back into the system. That needs to be warranted as well.

I welcome the summer economic statement. I would be cautious about spending too much and inflating the economy too much. Nobody has mentioned this possibility. We do not want to see a repeat of what happened in 2000 or 2001 when inflation started to rise. That is something we have to watch.

I welcome the opportunity to speak on the summer economic statement. While it is great that we have been given time to discuss the finer points of the fiscal space, it is important to remember that many people do not listen to what we are saying because they do not understand what the Government is doing. The Minister spoke about putting €500 million into a rainy day fund each year. It is as if he is raiding a pot of money, but there is no pot of money there. The Government's plans sound wonderful but there is nothing in them that will enhance rural Ireland and its development, assist small businesses or bring people who are out of work back into the workforce and back into business.

The Minister of State, Deputy O'Donovan, is responsible for procurement. The current approach leaves much to be desired. The actions we are taking are forcing small businesses that currently provide services to the State out of business. I would like the Minister of State, who, in his role in the Department of Finance, has succeeded the new Minister for Housing, Planning, Community and Local Government, Deputy Eoghan Murphy, to change the rules to ensure that regardless of what might said in Europe, the small and medium-sized enterprise sector will be catered for and supported as it engages with the procurement process. The process within the Department needs to be simplified. Small and medium-sized enterprises should continue to be included in that process, rather than being excluded on the basis of their levels of turnover. I have seen many companies that are not from this State win contracts for the procurement of various goods and services. Small and medium-sized operators are now providing the same services at a far lower cost, and almost at a cost to their own business.

I see nothing in the summer economic statement that will save people who are caught in bad mortgages with the banks by getting them out of the difficulties in which they find themselves. The Minister of State, Deputy D'Arcy, recently addressed the Seanad on the National Housing Co-operative Bill 2017. I have to say his contribution left no room for manoeuvre. The Government's response was completely negative. It did not give any hope to people who find themselves out in the pouring rain. They are looking for a little help from the State. We allowed €74 billion to be taken over by NAMA. I accept that it returned €32 billion. There is €16.5 billion in bad debt. I firmly believe that with a little legislative initiative and ingenuity, the State could take over those loans, or assist in the taking over of those loans, in a way that does not interfere with the national balance sheet. It should be possible for those loans to be worked out over a period without people losing their homes.

The Government promised that 700 social housing units would be developed in the first quarter of this year, but just 200 such units have been delivered. NAMA offered 7,000 units and the local authorities picked up 2,600 of them. The balance of the housing units held by NAMA - 72 units - are in the process of being leased or sold. All the rest of the units have been sold or leased, but the local authorities are refusing to take them. The Minister of State at the Department of Housing, Planning, Community and Local Government, Deputy Phelan, has a job on his hands to ensure the reform of local government takes into consideration the need to ensure that the delivery of social housing units is overseen by the local authorities.

Those of us in this House have to think beyond the bubble. We have to take the risks that are necessary to ensure our citizens are best served. We should not stick with the status quo when we are talking about education, health, housing or anything else. We should look beyond this House for assistance and initiative. We need to be brave enough to put in place the necessary plans and legislation to ensure citizens are taken into consideration over the next five years. Those who are in difficulty need to be helped. Housing authorities have told us that the homelessness issue, the problem of bad mortgages and the level of repossessions will get worse over the next five to ten years. We are not prepared for it. Every party in this House is ignoring the fact that serious numbers of homes will be repossessed over the next five to ten years. That is what we need to focus our thoughts on.

Tá cúig nóiméad ag an Teachta Tóibín.

Fan soicind amháin. Tá brón orm.

Is the Deputy on Facebook?

I ask the Minister for Finance to imagine for a second that he is part of a normal Irish family with a house that has a massive mortgage on it. Let us suppose that the house in question also has a hole in its roof. That family can choose what to do with the income coming in. Logically, the first thing a normal Irish family would do is fix the hole in the roof. Having sorted out the infrastructural elements of the house, the family might then seek to pay down some of the mortgage on the house to ensure that it is not overly exposed to any bad times it might go through over the coming years. When the family gets its mortgage into a sustainable state, it might then look at putting money into a rainy day fund. That would be the sensible thing for most families to do.

I say all of this as a way of explaining the position in which the country finds itself. There are massive infrastructural problems in this State. Those who want to travel between Cork and Limerick have to use a 1950s road to get between the two cities. It takes people in County Meath two hours to get into the city of Dublin each day. Many people get stuck on the M50 as they try to get about the place. There is no doubt that the infrastructure provided by the State is holding people back as they seek to live their lives and do their business. The hole in our infrastructure needs to be filled. The logical thing for the country to do would be to invest its money in that direction. For some unknown reason, the country has decided to start to save for a rainy day fund at a time when, metaphorically, the rain is coming through a hole in the roof.

People cannot understand why there can be no access to broadband in country areas while, at the same time, we are trying to save money for down the road.

It is natural to have a hierarchy or priorities at any moment in time and capital infrastructure is one of the productive investments a State can make. With tax breaks the money is lost, as is the case with a wage rise in the public service. The money goes into the economy but only comes back, and not massively so, by being spent. If a State invests in capital infrastructure, the chances are that in the long run it will get the money back in multiples of the amount it initially spends. In the past seven years, however, when this Government was faced with the choice of investing in public services, capital investment or giving tax breaks to those on upper incomes it has, for some reason, always gone for the last option. This has caused massive difficulties and only in Romania are capital investment levels lower. If we maintain our current capital investment level the Romanian economy will be the only one worse than ours after a period.

There is no magic formula for competitiveness with regard to businesses. They simply need to be able to communicate with customers and transport things to them, while having competitive inputs into the formulation of a product or service. How can they do that when most of the geographical space on the island of Ireland is without broadband and will not have decent broadband potentially until 2024? Fianna Fáil promised broadband for everybody in the country back in 2006 and now Fine Gael has pushed it out to 2024. The Department of Transport has stated that it needs €3 billion just to make secondary roads in the State safe, which shows the level of our infrastructural famine. In respect of energy development, we are going to have to pay €600 million in 2020 because this Government will not meet its climate change objectives. In Britain they are producing more solar power this summer than nuclear and coal combined but this country does not even have a solar industry at the moment. We do not even have a feed-in tariff for the solar industry and this is what a lack of capital investment produces.

I want this Government to be fiscally and socially responsible but we have the second highest debt per capita, lower only than Japan's. As sure as night follows day there will be a recession, a downturn in the next ten years. Whether this Government does everything right or not, there is an economic cycle that we cannot avoid.

That is why we need a rainy day fund.

Our job is to make sure we pay down our debt as best we can and that we have the infrastructure in place so that when the downturn comes we can deal with it in the best way. Giving tax cuts when the economy is on the up is the most illogical thing to do in the context of the cycle.

I will not have the chance to talk about public services but I call on the Government to take into account our responsibilities to invest and to write down debt.

There is a need to ensure that certain capital expenditure projects are given priority. I refer the House to a report commissioned by Cork and Limerick chambers on the need for investment in the M20 Limerick-Cork motorway, entitled Gearing up for M20: A Route to Success. The report, compiled by Indecon and Red C, is a detailed assessment and contains some very pertinent figures. One needs to recognise the action plan for jobs, the need for balanced regional investment and the need to ensure the economy grows in the regions. There are major challenges for young people looking to buy houses in the east of the country where a lot of FDI investment is taking place and there are major capacity constraints in transport, as well as quality of life issues. We need to disrupt the balance in favour of the regions and this report is very apposite and timely.

The report states there is a significant role for the M20 in enhancing the environment for foreign direct investment and indigenous investment and that it has the potential to support an estimated 4,000-5,400 direct jobs in the region. It states, "In gross terms excluding displacement impacts, these additional direct jobs could provide an annual gross exchequer impact of up to €128 million, depending on the nature of investment attracted." One can parse that figure in any way one wants but common sense tells us that a proper regional investment in infrastructure will bring with it an economic multiplier in the form of jobs. I ask the Government to consider opening up Kerry, Cork, Limerick, Galway, Sligo and Donegal in the north-west region, what used to be known as the Atlantic corridor, in the capital plan. The Minister for Transport, Tourism and Sport, Deputy Shane Ross, told me on 16 November 2016 there had been approval of €1 million for early works on the scheme. I welcome that, because there has been cross-party lobbying for the initial funding to get the project under way. He said, however, that the approval to commence planning and design and statutory orders would cost between €12 million and €15 million. Stage 3, the approval of the business case by the Department of Public Expenditure and Reform, will not cost anything while stage 4, the approval to submit the proposed development to An Bord Pleanála, will cost between €150 million and €180 million and the approval to commence construction will cost between €600 million and €650 million. These figures are from late 2016 but they give a fair indication of the cost of the project and I am making the pitch for it today. I recognise that I am in the presence of a Minister from the same region and from the county which devised this report. Politically, if we can all get to stage 2, 3 or 4 in the current capital plan to keep it on the agenda, it has the potential to deliver a massive economic return on investment in those regions. There is cross-party support for it and I hope the Government will bring it a step further in the current capital plan.

I welcome the newly appointed Ministers and agree with what they said. Things are very much better than they were and people on the streets in our towns and cities feel that life is getting better and more people are working. This statement is an indication of what we are going to do into the future. As other speakers have said, it is not perfect but it is good news for lots of people. I would like to see greater progress on some of the issues referred to. I welcome the investment in housing, in particular, and I would like to see further investment in our capacity to deliver more houses and accommodation in a more efficient way.

I have consistently raised the issue of the number of empty homes around the country. In Dublin city there are 31,000 empty homes, in Louth there are at least 4,000 and every county has a long list.

The percentage of empty homes is higher in Ireland than it is in the United Kingdom, which is a telling figure in itself. We need to look at what is best practice in some of these countries. In Bolton, England, there is an empty homes officer. I believe Bolton has a population of approximately 200,000 people and in six months in the past year, the authorities there managed to provide 523 new occupied homes in the city that were previously empty. There is an empty homes tax in the United Kingdom which local authorities have the discretion to apply and most do. I believe we ought to tax homes which have been empty for a significant period and which are not principal private residences and get them back into the marketplace. I believe there are sufficient and adequate incentives for landlords to do up these homes but I would not have a problem with the Government wanting to increase some of those. We need to look at the run-down and derelict areas in our cities and towns. Perhaps we need to look at changing the living cities initiative to make it more attractive for developers to go into run-down areas and areas which were formerly centres of employment. We have many empty millhouses in my home town, as well as derelict areas near the docks and so on. We should find an imaginative new way of making these habitable and occupied as quickly as possible. This is how we can reach the targets that are clearly identified in the housing strategy. In the past year or so, Louth County Council has taken abandoned homes, that is, homes which are closed up, derelict and abandoned and in which no one lives and brought 50 of them into commission. There are families living in them now and the reason they are living there is the council was able to slap a compulsory purchase order on buildings when it was not able to identify the owners. The council was able to do this in a short period and at a very low cost. The legal cost for the CPO in most cases was less than €1,000, and in the vast majority of cases it is unchallenged. This brings into occupation houses which were empty and an eyesore and a source of vandalism in their communities.

One of the points made by other Deputies was that we should have a social statement, that is, a statement on social policy, inequality and poverty and I agree with this principle. We ought to have quarterly statements on these matters in order that we be able to challenge and interrogate the progress of the Ministers and the Departments in this regard. Some Opposition Members have said this Government does not care but this is wrong. It certainly does, and what the Minister, Deputy Donohoe, has done with the former Taoiseach, Deputy Enda Kenny, is to invest in areas where there is a high prevalence of unemployment and drug abuse and a significant amount of crime. These are the areas we need to tackle and prioritise. We must build an equal society and while I would support such a debate, I point out the Government is and will remain absolutely committed to that social agenda.

The last point I wish to make concerns questions raised about the public sector and its capacity to do business. We should open up the public sector to short-term contracts and have many more people move into local government and the health services for a short time - two or three years or whatever - bringing skills and expertise into those bodies which they do not have at present. In addition, people in the public sector should be encouraged to take career breaks, go into industry and business and bring new skills and new management ideas into what can often be a hidebound and bureaucratic life for too many people.

I am glad to have an opportunity to speak for a few minutes about this review. It is timely to have a look back and a look forward. We need to look back on the journey we have travelled over the past six or seven years or more and, on the basis of our performance, look forward as to how we see our society developing in the future. There are vast differences in this regard. Seven or eight years ago, the economy was in free fall, emigration was rife, unemployment was growing rapidly - up to 15% - we had no ability to borrow, no borrowing capacity and no borrowing rating and we were shunned all over the world as being unstable and unnecessary to a great extent in the financial markets. We have come through that now and the time has come to look again at how we might develop the next phase of the recovery. The people of this country and the previous Government and its leadership achieved a great deal. It was not easy. If anyone thinks it was, all we have to do is think back over the issues that have affected us all over the past seven or eight years.

Housing is a very important point at present and growing in importance daily. As I have said recently and many times previously, this issue did not originate in the past couple of years. It originated nearly 20 years ago when the housing policy was changed, and until such time as that policy is changed back to what it was, whereby the local authorities build houses directly for people or provide private sites to people who want to build affordable houses, we will not solve the problem. It cannot be done. I assure those who think it can that like the Acting Chairman, I have been around a while. Moreover, I have been in this House for a long time too and I have yet to see how this problem can be solved other than in the old-fashioned way, that is, by building more houses. This would have two responses: it would meet the urgent need for housing and deal with homelessness and would also stabilise house prices. As long as a person must borrow something like four or five times his or her annual income in order to buy a house, it is not sustainable. It cannot be done. I have spent some time, as I am sure the Acting Chairman has, in the courts over the past seven or eight years explaining exactly that: it is unsustainable now by virtue of today's criteria and those loans were unsustainable at the time, regardless of what criteria were applied. We have an issue here.

We need to look again at investment in infrastructure. This is a very good and positive thing. Now is the time to do it. We must look at those parts of the country to which the Celtic tiger did not come. Many people seem to think rural Ireland has only been visited by the aftermath of the recession but there was a division beforehand. The division came at the peak of the Celtic tiger. What about all the people who said during that period that they never saw the Celtic tiger or had any experience of it? This applied to both urban and rural settings and this is very much a moot point still. We need to be absolutely certain that what we do from here on in is manageable, affordable and soundly based and that we do not repeat the same mistakes. If we play our cards well, carefully and cautiously and do not repeat the mistakes of the past, get ahead of ourselves and become overly ambitious, we will be on the right track.

The health services, the administration of justice and housing are three critical issues, along with road and rail infrastructure. For one reason or another, some of which is our own fault - everyone's fault - it appears to be fashionable now to dumb down the quality of the health services and claim that everyone is to blame for everything that goes wrong. Many of the things that are happening and do go wrong are manageable and can be averted before they happen. There is no use complaining about the lack of a particular aspect of services in an area. If the services already there are closed down for whatever reason and if we do not use them, and this is hugely important, there is no use replicating the structures to deliver those services. We need to deal with this as a matter of urgency.

We need also to look at the administration of justice and ask ourselves where we are really going in this country. Do we have respect for justice anymore? Do we have respect for authority in this country? Do we have respect for the members of the Garda, the enforcers of the law, at all times? Given some of the things I have seen in this House and outside it, I must raise some questions. We have seen things happen that would indicate to me that we do not have respect for these things and that is detrimental to where we are going.

I am happy to have the opportunity to say a few words about the summer economic statement. Unfortunately, this is an as-you-were document: no change and a continuation of existing policy. What this means is recovery for the rich and powerful in our society and living from hand to mouth for all those families on low and middling incomes. It means not having two cents to rub together at the end of the week.

Indeed, the Society of St. Vincent de Paul in its budget statement tells us exactly what it means. It calls Ireland an unequal nation with growing gaps in income. It tells us that the top 1% increased their income share by 20% in the last 12 months, and the lowest 50% lost 15% of income share at the same time. That is the situation.

There is a failure in this document to tax the wealthy. There is no taxation, for instance, on the huge financial assets of the wealthy in our society. The wealthiest 10% have financial assets now of in excess of €37 billion over peak boom levels. There is no tax on that. The 300 wealthiest people in this country have €100 billion in wealth. Twelve of those have €50 billion, and €6 billion of that arose in the last 12 months. This is an absolute scandal. The rich and powerful are simply not paying their fair share and they must be forced to do that. It is the Government's job to do that.

Capital expenditure is totally inadequate, and is particularly deficient in the area of housing. Patricia King, general secretary of the Irish Congress of Trade Unions, only last week made a very important statement on this issue when she said that Europe must be told to wait for payment of debt, that the €3.5 billion in shares from Allied Irish Banks must be used to build social houses, and that local authorities must lead an emergency housing build into the future if we are to tackle the housing emergency.

The document has the usual nod in the direction of balanced regional development. It refers to "ensuring balanced regional growth". Several weeks ago the Central Statistics Office issued its unemployment figures. It showed that in Tipperary all of our large towns and villages have unemployment levels of in excess of 5% over and above the national average. That is a total of 26 electoral divisions in the country. Unfortunately, the towns of Carrick-on-Suir and Tipperary are unemployment blackspots, having more than 27% of their population unemployed. There is a number of things that need to be done to help this situation, to increase employment levels and to ensure that we get our fair share of employment and investment into the county. The first is the upgrade of the N24. This is a vital social and economic corridor right across the county. Kilkenny, Waterford and Tipperary city and county councils have requested the upgrade of the N24 to motorway standard and there is a proposal to that effect with the Minister currently. If that was done there would be a saving of approximately €400 million and huge economic benefits for Kilkenny, Waterford and indeed all of south Tipperary, including bypasses of Tipperary town, Clonmel and Carrick-on-Suir. It is a vital economic corridor.

Another vitally important issue is the regional jobs development plan announced by the Minister a number of years ago. There are ten towns which are identified in that plan in which the IDA will provide additional industrial and office space. None of those towns listed is in Tipperary. That needs to be rectified urgently.

I hope this document can be amended to ensure that low and middle income families, and indeed rural Ireland, is treated fairly into the future.

I thank all Deputies from every side of the House for participating in this debate. I call on the Minister to conclude.

I thought the Acting Chairman was going to make particular reference to Deputies from his own constituency for a moment there, given his generosity earlier.

I also thank all colleagues who have contributed to this debate and who have offered their thoughts on the summer economic statement. I will respond to different points that were offered, but I will start by making the point that a recovering economy is not the same thing as a recovered society. This Government understands that completely. We cannot achieve what we want to make happen within our society unless we have a recovery taking place within the economy and the prospect of stability in the future. My colleagues from the Government benches have pointed to the fact that progress is being made. Acknowledging that progress has been made is not the same thing as saying that we do not need to make any more progress. Acknowledging that change has occurred is not the same thing as saying that we do not need to make more change in the future. Acknowledging and arguing that our society is strong is not to dispute the fact that our society is still scarred as a consequence of the horrific crash our country, our economy and our people went through. However, not to acknowledge incremental progress that has been made and the steady change in our prospects is wrong.

It was stated by some colleagues here in the House today that no progress at all is being made. Progress is being made. We are making efforts that are having an affect on the lives of people. Of course we acknowledge that there is more that must be done. That is the message that comes out of the summer economic statement. It is a message of ambition and realism. It acknowledges that we have opportunities but is explicit about the risks we face due to the changes in our external environment, whether that be Brexit or what might happen in America, or something that might happen here at home that a future Government may have to respond to, such as the prospect of our economy getting to a point that pricing for projects rises so much that we cannot get value for money. It recognises all of those things.

I heard some Deputies, particularly those associated with the far left, stand up and seek to back up the posters that they have put up in many parts of Dublin which call for a revolution. Who would this revolution benefit? We want to deliver continued change that can benefit all in our society. Let us recognise some of the facts that are contained within this summer economic statement. Let us recognise that in the framework that I am presenting to the House today that we are planning to increase capital expenditure next year by 16.6% versus where it is this year. The year after that we are seeking to increase it by 24% versus the previous year. At the end of this programme we are planning to increase capital expenditure to just under €8 billion, an increase of approximately 75% versus where we were at the lowest point in our difficulties. Anybody who stands up and claims that this is a capital plan which is lacking in ambition is not taking account of the fact that year after year, assuming the continued stability and growth within our economy which we believe we are able to deliver, we are laying out a framework that will increase spending by hundreds of millions of euro year after year for the next number of years.

This offers a strengthened framework in which this Government will make choices about how we can better use the resources available to us to deliver on the opportunities we have to respond to the challenge that never ends of how to be fair to all. This is now a level of resource and if colleagues want to go beyond that they have to answer several questions about it, namely, where will we get the money to do it and how can we be sure that going beyond this point will not trigger some of the forces that were central in the recent downfall of our economy. This is why issues of value for money and strong regulation are central to what we will do.

In response to the claims made about fairness, let me offer some facts on the fairness of the redistributive model here. Ireland is the most effective country in the Organisation for Economic Cooperation and Development, OECD, at reducing the level of inequality between pre and post transfer income. In respect of poverty reduction, Ireland has the largest improvements in at-risk poverty rates in the European Union, after taking account of social transfers, which is what social transfers are there for, after taking account of pensions. Those who argue that the measures we have put in place are not delivering improvements for those who need support the most ignore the reality of the cumulative impact of our social transfer policies, not to mention the fact that the way our tax system is set up is one of the most progressive in the European Union.

As I make these points I know that Deputies will offer individual examples of where the need for fairness is not met, of projects that have not gone ahead, of needs that have not been met as quickly as we would all want. I understand this, as does the Government, but if we have learnt anything from what we went through recently it is that if we do not have a sensible economic framework that makes careful choices we will not have the prospects and resources we need to respond to the level of need that I know is there, and to take advantage of the opportunities our country has. When the Taoiseach speaks about the republic of opportunity and the Dáil asks what progress has been made in it to date, I point, for example, to the decision to make available 970 more special needs assistants in our schools. Is that not an example of a government meeting the needs of those who need support the most? I point to the agenda this Government has set out for the rest of the year, looking to put in place a budget that builds on progress made and to make careful choices about how we can achieve more with taxpayers' money. We will then follow that with a ten year capital plan that will lay out for the first time in years in our country a long-term approach to make sound, sensible choices for the taxpayer, accompanied by a planning and spatial framework that meets the needs that the Minister of State, Deputy O'Donovan, described a few moments ago. That is the agenda of a government based on choices about our economic strategy, balancing our books next year, looking at how we can make more effective use of taxpayers' money and how we can make and achieve more of the €60 billion we are planning to deliver next year and we will lay out approaches and thoughts on that in the comprehensive spending review that I will publish soon. This offers a framework that tries to learn the lessons from the past and to acknowledge the new environment in Ireland, where investment in infrastructure is needed in a way that would have seemed unlikely some years ago, and where there is the ability to generate steady levels of increased investment in public services, in schools and hospitals but within a framework such that not only do we do the right thing by those we are privileged to serve and govern now, but also look to make long-term choices to make sure we can maintain the kind of positive change we have seen in our circumstances in a steady way in a changing world.

Sitting suspended at 12.45 p.m. and resumed at 1 p.m.