Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

Much has been written about forecasts in the last week or so. Large surpluses of €65 billion are forecast for between this year and the following three years. They are only forecasts; it is not money we have now but represents the central scenario and the current best estimate by officials in the Department of what is likely to happen. Additional demands may arise. We discussed non-core expenditure earlier, for example, making provision for people from Ukraine who came to Ireland. Whatever way one looks at it, if these figures materialise, they are very large sums of money. Who would have thought just a few years ago that Ireland would be in this position? It is a very good news story and a credit to the careful management of finances in recent years, the strength of the economy, the foreign direct investment, FDI, sector, the Irish people, private enterprise and so on.

We need to be very careful in the decisions we make. Major costs are coming down the line, which are unavoidable. Every independent report has pointed to the demographic and age-related costs we know are coming. We estimate that by the end of this decade, on a standstill basis, it will cost €7 billion to €8 billion more than it did at the beginning of the decade to provide services because of age-related pressures. Those are real costs that need to be met. The national debt is also very large. The figures are available in Table 1 - at the end of last year, it was €225 billion. The cost of servicing it is manageable now but as those bonds mature, they will inevitably be re-financed at higher rates unless we pay them down with cash reserves. I do not want a situation in which we use more and more of the taxes we collect from people - their hard-earned money - to pay interest on the national debt. I think it would be a waste of money. That also has to be taken into account.

The Deputy made some valid points about the public capital programme. There have been underspends in the last few years, which the Minister, Deputy Donohoe, will speak about. Covid is one factor behind that but it is not the only one. There are also capacity constraints, which is why we are reforming the planning system and trying to make the overall system more efficient. The Minster introduced changes to the approval process in respect of major capital projects, which I hope will also help. We must ensure that we get value for money at all times, which is always a key consideration. There are constraints in that regard, which we must acknowledge. The Deputy provided several examples such as retrofitting, public transport, forestry, housing and putting in place services to facilitate housing, all of which are noble things we are already aspiring to and have large budgets to do. In the coming weeks, I will discuss with the Minister his work to manage the capital budget. I did that job of managing expenditure for two and a half years; it is really difficult. Colleagues always have lots of ambitions and projects they want to advance. We will discuss the management of the capital budget and what is an appropriate level over the next few years.

In the main, we must put these resources away for costs we know are coming our way. They are definite costs that will hit Ireland and will either be paid for through resources we put away or paid for down the line by people paying taxes at that time. We decided as a Government to keep the pension age as it is, which will come at a major cost. This will not fully offset that cost; other changes are still be needed to meet those age-related costs such as the cost of healthcare, homecare, pension provision and so on. The Deputy made several points about capital expenditure, which the Minister, Deputy Donohoe, and I will discuss over the next few weeks in the context of the summer economic statement, when we will lay out our budgetary strategy for the next 12 months.