Michael McGrath (Cork South Central, Fianna Fail)
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I will talk about the debt issues with which the Deputy began and the Minister, Deputy Donohoe, will come in and outline what we are doing on housing by way of direct expenditure support. I welcome the Deputy's comments. We do not talk about the national debt enough. It is a real burden, not only on this generation but on future generations, and that is why we have to make sure it is sustainable into the future. Looking at the stability programme update, the forecast this year is general Government debt of €223.5 billion and the net debt is approximately €40 billion less than that when the cash reserves and other financial assets held by the National Treasury Management Agency, NTMA, are taken into account. That is a debt ratio of almost 79% at the end of this year using GNI*. If we were to use GDP which is the standard measure across Europe, we are closer to 40%, a much better position. However, at the headline level, our gross debt on a per capita basis is high in the developing world and of course we have to service that debt every year and are paying close to €3.5 billion this year on interest to service the national debt. The NTMA has done a really good job of removing those refinancing chimneys that had been there. It has extended out the average maturity profile to something in the order of ten or 11 years at this stage and the average rate across the portfolio is approximately 1.5%. The NTMA has really taken advantage of the very favourable conditions in recent years, knowing full well those conditions were not going to last into the future. One of the considerations the Minister, Deputy Donohoe, and I, are now taking into account, while also looking at projected surpluses, is what we can do to make our debt more sustainable because we cannot predict refinancing costs into the future. Even in recent times, we have seen an increase in the cost of borrowing. It is now around 3% for Ireland in terms of ten-year money but because of the favourable economic situation and the fact that we have had upgrades to our credit rating, we are now borrowing on a par or less than a number of core eurozone countries including France, Belgium, the Netherlands, Finland and so on. That is a real gain from an Irish point of view. If we compare it to the UK borrowing costs for example, it is approximately 5.5%. We are in a good position but we have to make maximum use and take advantage now of the projected surpluses we have. However, there are choices to be made and they are not easy. There are lots of things we want to do in the short term, while at the same time making provision for the future to make sure the debt, and indeed our public finances, are sustainable into the future.