Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Regarding the multi-annual financial framework, MFF, we will be contributing more to the budget. Later on in the Dáil this week, I will outline some of the issues and questions regarding all of this. The tone among my fellow finance ministers on the topic is very mixed. Many colleagues are resolutely opposed to any increase while a small number are willing to see some increase and quite a few are looking for a decrease in the contribution they make. A smaller number is looking for a decrease in the scale of some parts of the EU budget. The scale of national contribution to the EU budget is a major topic of political debate in a number of other EU countries. Ireland has only recently become a net contributor, as the Deputy is aware. Ireland has now become the third highest contributor per capita. One of the main reasons why we have become a net contributor so quickly is because of the scale of national income growth here in a post-crisis period. The EU uses gross national income in a modified way to calculate a country's budgetary contribution. I expect that it will increase in the future. I will be making the case that an increased contribution from Ireland in terms of maintaining our current percentage contribution but seeing our national income grow in the future is something we should consider doing because the Single Market is of incalculable value to Ireland. Putting measures in place to support its development across the European Union is very much in our long-term national interest. The flip side of it is increased budget contributions to the EU. As that means we cannot spend that money on other things in Ireland, we need to get that balance right. The next question that tends to be put to me concerns the figure. It is a negotiation in which we are involved and it is not appropriate to lay out that figure at the moment. Even if we were to maintain the tab unchanged, it would mean that Ireland will pay more in the future for the simple reason that our national income is growing.

As for what is happening in other countries, for example, the current debate in the UK, there has been a hint of that in the questions I have received to date from other members of the committee. There are three things to be aware of as we look at where we are. The first is the huge scale of capital expenditure growth that has already occurred in Ireland. In 2016, we were spending €4.2 billion per year in capital expenditure. For 2020, that equivalent figure will be nearly €8.2 billion. We have seen a really big increase in capital investment across the past number of years, which I decided was the appropriate response to a post-crisis society and all of the challenges we face in terms of housing, homelessness and investment in carbon change in our economy. We have implemented the capital expansion that is being debated elsewhere in Ireland and it is under way.

The second point is that our level of national debt is still very high when looked at in the right way for Ireland and we need to be aware of the challenges we may face in the future regarding corporation tax receipts. This is why running surpluses would be so important. Let us bear in mind that in the pre-crisis period a decade ago, we were running surpluses and we still got into awful difficulty. This was for many different reasons and lots of those other reasons are not present in our economy but it still shows the need to have surpluses because I believe that as we move into future years, we will face challenges that will be different to those we faced a decade ago.

The Deputy will be well aware of the third point, which is that the UK has its own currency and central bank and will be running higher deficits in the future if it makes this decision. We have our own currency but we share it with hundreds of millions of other people. We have our own Central Bank but key monetary policy decisions are made by the European Central Bank. We forget all of that at our peril and we forgot it previously.