Dáil debates

Wednesday, 27 October 2010

Macro-Economic and Fiscal Outlook: Statements

 

4:00 pm

Photo of Pat CareyPat Carey (Dublin North West, Fianna Fail)

Cuirim fáilte roimh an deis seo labhairt faoin bplean eacnamaíochta atá againn chun tabhairt faoi na dushláin ollmhóra atá romhainn mar thír. Mar Rialtas, ní chuireann muid aon fhiacal ann faoi na fadhbanna seo agus míneofar go beacht cad atá le déanamh agus cén fáth. Tá an plean seo bunaithe ar an tír iontach seo a chur ar bhóthar a leasa arís. Is é an plean ceart é agus is é an t-aon phlean atá inchreidte má tá fúinn na dúshláin atá romhainn a shárú. I welcome the opportunity to speak on this important issue. It certainly is the most important period in the economic and social life of Ireland since I first entered the Dáil in 1997. I listened with interest to as many previous speakers as possible and thought that most contributions were both reflective and thought-provoking and that they will contribute to a greater consensus on the serious plight with which the Government must deal.

The Government has stated its intentions clearly to the people. It has outlined its goals and has explained its reasoning and will continue do so in the coming weeks. It has been up-front about the magnitude of the challenges we face. It has engaged constructively with the Opposition and has been clear that there are no easy options or soft decisions, as to pretend otherwise would be to mislead the people about the seriousness of the challenge we face. It would be an unthinkable failure of government to pretend that we somehow can wish away our current difficulties. This is not a challenge that we can put off until some magical tomorrow but we must act swiftly and decisively. While the Government has listened to various alternative views, both inside and outside the House, on how it should approach the task that now faces our country and people, the plan it has set out is the only credible one. It will not be a painless task but any attempt to postpone that pain or sugar the pill would put the economic future of our country at risk. This is not a risk the Government is prepared to take and I do not believe the people wish to do so either. I am not being condescending but wish to comment positively on the worthwhile solutions I have heard thus far. They will feed into the Government's discussions both in respect of the four-year framework plan and regarding the preparation of the budget later this year.

Recently, the Government drew a line under the uncertainty in the banking sector, thereby allowing it to concentrate on getting the public finances back on track. This is not just about gaining the trust of the international markets and ensuring our ability to borrow, but also is about job creation. We have learned from our experiences in the 1980s that unless businesses have faith in the viability of the Exchequer's long-term position, they will not create new jobs. This is the reason the Government is stressing, above all else, the credibility of its plan. Its ability to get people back to work and return the economy to growth depends on that credibility. Again, this is not just about impressing the faceless markets but is about creating jobs for citizens and securing their future. In order to create employment and growth, we must show that we have the courage to be credible and that we have the courage of our convictions. In so doing, we must get the balance right to ensure that our potential to return to growth is not damaged. However, the consequences of failing to act now cannot be ignored.

There is no question but that the Government will strive to be as fair as possible in the decisions it will make. As Minister for Community, Equality and Gaeltacht Affairs, I have seen at first hand the important role played by communities across Ireland in developing the economy. Our communities are the building blocks of our economy and society and the strength of such communities always will depend on their ability to protect their most vulnerable. Both the House and the Government will strive to protect the most vulnerable among us and I reject the simplistic notion that a severe budget is by necessity going to be an unfair budget or one that targets the most vulnerable. Research by the ESRI has analysed the distributive impact of the tax and welfare changes of the 2009, 2009 supplementary and 2010 budgets, and while those budgets were characterised in some quarters as unfair or as excessively targeting the less well off that is simply not the case.

That research shows that households in the bottom half of the income distribution maintained their position and in some cases recorded modest income gains of between 1% and 3%. By contrast, better-off households saw falls in their income of around 3%, with the richest households losing the most, at 6%. This shows that Government budgetary policy during the fiscal crisis has protected the living standards of lower income groups and placed the burden of the tax and welfare adjustments on better-off households. We will continue to make every effort to protect the most vulnerable. So, while we must all bear the burden of these necessary savings, our economic priorities will continue to be informed by our social priorities.

A recent report commissioned by my Department has shown that in recent years Government intervention through social transfers has made a real difference to the lives of the marginalised and has helped to tackle poverty and social inequality. While all sectors of society will have to bear some of the burden of budgetary savings we are also conscious of the need to ensure that the significant progress made in tackling inequality is not squandered.

The Irish people have shown great backbone and resilience in dealing with this crisis. As a people we have held our nerve and as a Government we must continue to hold our nerve. There is no point whatsoever in giving people unrealistic hope about the scale of the challenge we face. The Irish people deserve better than that. There is no point in peddling wishful thinking. We are not playing fantasy budget here. This is a very real crisis that requires a decisive and pragmatic response.

The Opposition parties now accept the need to return to the 3% of GDP deficit figure by 2014. We are also, I believe, in agreement that this target has to be achieved without jeopardizing the ability of our economy to return to growth. That consensus is welcome but we should not now return to the type of posturing that only adds to our problems. Our present situation demands more than platitudes about change and making a new start. I welcome what I have heard today.

We need real solutions to real problems. We know that the best way to get people back to work is to get our house in order and we are doing that by fixing the banking system, restoring order to the public finances, regaining our competitiveness and creating jobs. As my colleague, Deputy Killeen, has said, our economy is emerging from recession with the prospect of stronger growth next year. Our return to competitiveness has been led by our export performance with new figures today showing a 12.8% growth in merchandise exports in the third quarter of this year and a 9% increase in total exports.

Our stability plan is vital to our efforts to return to growth but it is important to stress that it is not being undertaken in isolation from our growth strategy, our smart economy plan, our jobs strategy and our plan for structural economic reform. Our growth and jobs strategy is a comprehensive plan to get people across Ireland back to work and to secure the jobs of those currently in employment.

In my own Department, for example, we have responsibility for the Leader programme which will create 12,000 jobs in rural Ireland. I have seen this programme at work all over the country and I am determined that every last cent of the €440 million available will be spent on job creation in rural Ireland. Leader has the potential to transform rural Ireland, village by village, parish by parish, town by town and job by job. We can see the benefits of Leader already, for example in the work of Farrelly Willow, Ireland's leading company in willow production, based in Kells, County Meath. I visited it recently. The company will be among the biggest producers of biomass in the country and will be selling biomass into the new electricity generating plant in Ferbane in County Offaly. One of the problems which I freely acknowledge we need to resolve, is the excessive regulation faced by such companies. Other companies benefiting from Leader are Spring Water in Lisseycasey, County Clare; McCarthy's Ice-cream in Ballybunion, County Kerry; Dooley Wool Limited in County Offaly; and O' Donnell's Crisps in Clonmel in Tipperary. These are real examples of putting enterprise to work.

In my Department, we are also currently reviewing our White Paper on rural development to ensure that it meets the changing needs of rural Ireland. In the last two weeks I met the EU Agricultural Commissioner and the EU Commissioner for Regional Development about the many issues that face rural Ireland. I am convinced that we are getting a very good hearing from the Commission.

In 2009, Údarás na Gaeltachta, which also comes under the remit of our Department, created 710 new jobs, despite the change in the economic climate and total full-time employment in Údarás na Gaeltachta-assisted companies at the year end was 7,472.

In the coming weeks, I hope to finalise the Government's ambitious 20 year strategy for the Irish language. This strategy is not just about promoting and preserving the Irish language, it is also about ensuring that we benefit from one of our great natural resources.

The Government will ensure that the great qualities of the Irish people continue to flourish. That is the reason we are taking these difficult steps. Our guiding motivation is to return our country to the levels of stability, employment and growth that the Irish people deserve.

Cuímhním ar an seanfhocal cáiliúil: Ní neart go cur le chéile. Tuigeann muintir na hÉireann fírinne an ráitis sin. Tuigimid mar Rialtas chomh maith é agus déanfaimid beart de réir ár mbriathar.

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