Joe O'Reilly (Cavan-Monaghan, Fine Gael) | Oireachtas source

The Bill attempts to achieve two broad objectives. First, it seeks to continue making progress on the public finances, which is so vital from every perspective, and ultimately to put our people to work. Second, it seeks to support existing employment while stimulating the creation of new employment.

We have a current budget deficit level of 8% of GDP and are heading for 7.5% next year. We are on course to meet the target of 3% by 2015. That is an extraordinary achievement from a position of effective bankruptcy when we entered Government. At that time, the public finances had gone completely awry with enormous implications for employment, inward investment and borrowing for economic stimulus. The negative implications were enormous then but, conversely, the implications of where we are getting to now will be enormously positive. We are on course to achieve the fiscal deficit target of 3% of GDP by 2015.

It is worth noting also that banks are back borrowing on the markets, while banking is beginning to normalise. We are on course for growth this year, which is a great achievement. While the promissory note deal might be somewhat abstract for the public to fully comprehend, it has enormous implications for the country in that it will prevent the borrowing of €2 billion per year for the next ten years. That has a double effect in that the borrowing would have led to a further reduction in demand in the economy, meaning a reduction in domestic activity as interest would be paid, thus leading to a diminishment of services. The sum of €3.6 billion will not have to be paid for each of the next eight years, with consequent implications for front-line services and economic activity generally. Economists are now saying that by the time we get around to paying the debt in 2038 it will effectively have diminished by over 40%.

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