Damien English (Meath West, Fine Gael) | Oireachtas source

I thank the Ceann Comhairle for the opportunity to say a few words on the Finance Bill which is another important part of the process of recovery of this country as we get there bit by bit. I will address a couple of issues in the few minutes available.

The Minister stated that we are now in a position where we can be optimistic as a country. That is an important point to get out there. People need to know the country is recovering. They need to know there is hope. When we are out there meeting people on a daily basis, they are worried and concerned. They are trying to manage, week to week. If they know the country is turning around, they will buy in to what we have to do here. They will accept it, work with us on it and try to help. However, they need to know. The signs are there to prove that we are not merely making this up. This country is turning around. There is hope and the Minister was correct to state last night that we are bringing in a finance Bill to the House during a period of optimism when matters are improving.

A couple of recent movements provide us with proof in that regard. Our record of winning jobs in the past two years is good. It is not brilliant when compared to the problem of unemployment, but to be winning more jobs per week than we are losing is heading in the right direction. We are coming from a position where there were nearly 280,000 jobs lost in the three years before we came into office. We are in a position of stemming that rot. We are back, and trying to win more jobs per week. That is what it is about, winning more jobs every week than one loses because there are still certain sectors, such as construction, banking and some of the financials, in which there will be more job losses as these sectors return to their proper levels and proportions of GDP. There will be adjustments but we are on the right track.

The sale of Irish Life yesterday, but also the raising of funding on the markets by our banks and also by the State during January, sets out a positive image of the country and that international investors believe in the future of this country. They would not put their money in this country if they did not believe it has a future. People can see such facts. Investment is coming into the country. Slowly but surely, we are winning that game.

The recent deal on the promissory note is a very important initiative. I have listened to Opposition Members state it is not a deal at all and the Government took over the debt. It was made national debt by the previous Government. None of us likes it. On the night of that deal, I spoke here before we knew about it. We hated having the Anglo Irish Bank debt, the promissory notes, etc., but we were stuck with them. One could not merely take out the Sinn Féin magic pen and wish them away. It does not work that way. One must negotiate. One must work on it and deal on it. If Members understand the time value of money and the net present value of money, they will realise that it was a good deal that will stand the test of time. It will prove to be a win-win for us in the long term in terms of the actual debt, but even in cash terms. In trying to run this country for the next couple of years when funding is short and is very hard to get, from a cash point of view alone, if nothing else, that deal was a win-win for Ireland. It will free up money, with which we can fund other projects, but it also means we need not go out this year to find the guts of €7 billion or €8 billion to pay back this year's payment, last year's and the interest. It frees up the necessity to raise that funding, quite apart from the fact that 40-year funding, if one applies net present value, represents a win-win for us. If we stood here a couple of years ago and were strong enough in our deals with Europe when we needed approximately €60 billion to continue paying for the country's services and €60 billion to save the banks and if we had gone out there and looked for €100 billion long-term funding with a term of 40 years or 50 years at 1%, everybody would have been happy and we would not have been under pressure over the past couple of years. That is the way one would do it - one would get long-term funding when one has short-term difficulties that one cannot manage to pay back. Therefore, the deal is a win-win.

Returning to the bigger problem, last night the Minister spoke of returning stability to the public finances. As I mentioned previously, it is only in time that people will realise the real damage the era of former Taoiseach, Mr. Bertie Ahern, and Fianna Fáil did to this country in 2001 and 2008 when they let expenditure go completely out of control in nearly every Department. If one analyses the departmental expenditure trend - I have seen it previously but I will get the information again in parliamentary questions - we can see the reckless spending during those years. That spending was not from permanent revenue. It was from short-term gain from a housing boom and construction, and yet Mr. Bertie Ahern and all his colleagues in Fianna Fáil, including the newly reformed Deputy Martin, decided to spend it on long-term initiatives. They gave the people lower tax rates and extra services. In many cases, they gave staff extra pay. What they really did was give people false hope. Based on that everybody used the new wages, lower taxes and better services - all of which, let us not deny it, were nice to get but were not sustainable - to take out mortgages and loans because they were confident they could repay them. The boom was built on sand. People are faced with a reduction in their disposable income due to wage reductions, increased service costs or taxes, etc., and yet their debt still exists. That is the mess with which they were left. We are aware it is not the right time to introduce either the property tax or charges or to reduce overtime allowances but there is no choice in the matter because at the same time the previous Government was encouraging everybody else to blow their money, it itself did so and committed the State's finances to an unsustainable position. This left us overdrawn some years ago by €20 billion and last year by €15 billion. This year, we are still overdrawn by between €12 billion and €13 billion.

Nobody will continue to lend us that money to spend on services if we continue to be overdrawn. We have no choice other than to reduce that deficit somehow. That is done through negotiation and it is a slow, hard and difficult process. People need to recognise the context for the Finance Bill which is trying to introduce measures to help reduce that deficit gradually. At the same time, the ten-point plan for small business is trying to encourage job creation. Much of that plan relates to freeing up cash for small businesses. In the Departments we now have Ministers - the Minister of State, Deputy Brian Hayes, and the Ministers, Deputies Noonan and Howlin - who understand how important it is for businesses to have cash in order to conduct their businesses and create jobs. Many of these initiatives free up cash and allow that.

I ask the Minister to consider something that is not contained in the Finance Bill. The Minister of State, Deputy Brian Hayes, who is present, is aware that the Minister, Deputy Varadkar, has introduced a pilot voluntary scheme to allow communities to repair their own local roads. As the Minister of State travels around the country he will see many local roads - especially given his responsibility for OPW - and will have seen the problems people are experiencing. In my county, mainly in the Kells electoral area, roads are crumbling and falling apart. They are being left in a very dangerous situation owing to reduced investment in them over the past four or five years. These roads need immediate work and this scheme allows residents in conjunction with the local authorities to fix the roads that would not be due for fixing under the local authority's three or four-year road plan.

As part of the Finance Bill, the Minister should consider introducing a VAT exemption, some form or rebate scheme or a tax relief to offset some of the costs communities bear to make their roads safer and more user-friendly. It is not ideal that our local authorities cannot keep up with the crumbling roads. It is not necessarily their fault given the systems that have developed over the years and a reduction in the money available in the country's present economic situation. So it is not their fault and it is not ideal that the Minister for Transport, Tourism and Sport should need to introduce such an initiative to encourage locals to spend their money. However, if we see that as a short-term solution, we need a whole-of-Government approach and the Department of Finance may have role in easing that financial pressure so that if people decide to spend money fixing their local road to make it safer, there is a bit of tax relief on that. That is the right approach.

The same model could then be used in other areas. The schools summer works scheme has been abolished. If my proposal works in this case, we could then reconsider that scheme. Some years ago I proposed this to the then Minister, Mr. Noel Dempsey, as a way to get work done on schools. He took it on board and invented the devolved grant scheme, which was only a variant of it but was not managed correctly. This is a way to encourage locals to put spare cash into their own services and get tax back on that also. I believe the Finance Bill is the vehicle - excuse the pun when I am talking about roads - to help achieve this and I ask that it be considered.

I could discuss many other issues, including the report of the Joint Committee on Jobs, Enterprise and Innovation on developing a youth entrepreneurial fund, as mentioned by Deputy Lawlor. Other aspects of that report, which we launched yesterday, are the part-time work initiative, which would basically use people's existing social welfare payment to fund a part-time job for them. The Departments of Finance and Public Expenditure and Reform, along with the Department of Social Protection could play a leading role in using the same money in a different way to get people closer to a full-time job.

See this speech in context