Eamon Gilmore (Dún Laoghaire, Labour) | Oireachtas source

This is the budget that will take us out of the troika bailout. It will underpin recovery and help to create more jobs. It does everything possible for hard-pressed families and is pointing the way to a better future. When the Government took office 31 months ago, the country was faced with the worst economic crisis in its history. Our economic sovereignty had been surrendered; 250,000 jobs had been lost and tens of thousands more were at risk if financial stability was not restored. Without the bailout loans, there was five months money left to pay for all public services and no means to borrow more. We literally would not have had the cash to open schools the following September.

Today that situation has been transformed. Financial stability has been restored. The State can borrow again at affordable rates and we are in a strong position to exit the programme at the end of the year. That is something which few predicted was possible in the spring of 2011. Financial instability destroys jobs and livelihoods but stability provides the platform for growth and job creation. This budget copperfastens the stability that has been so hard won. As a country, we have been through too much to put that stability at risk now. Just as we should not put stability at risk, neither should we put recovery at risk. As I have said many times, this budget does what is necessary to ensure we exit the programme but no more. The total adjustment of €2.5 billion is the minimum we need to do to ensure we exit the programme smoothly without doing undue damage to the emerging recovery in the economy. This budget strikes the right balance between hitting our deficit target of 3% by 2015 and protecting jobs and living standards. The 4.8% projected deficit gives us a prudent buffer to ensure we hit our European targets. Achieving a primary balance is an important milestone in keeping our debt sustainable. At the same time, keeping the adjustment to €2.5 billion is a clear sign to the people that there is light at the end of the tunnel. It is clear evidence that the economic nightmare inflicted on them by Fianna Fáil is coming to an end.

There are very real signs of hope in the economy. When we took office, 7,000 jobs a month were being destroyed. Now we are creating 3,000 a month. When we took office, the live register was heading for 500,000. This week I hope it will fall below 400,000 for the first time since 2009. When we took office, house prices were in freefall. Property prices are now rising again in Dublin and construction activity is returning. While GDP is being held back by the effects of the patent cliff, there are signs of recovery elsewhere. Exports are growing; retail sales are stabilising; and confidence is improving. The agrifood sector is performing strongly and the tourism sector had a very strong year. Ireland’s reputation has been restored and the flow of foreign investment into it is strong. Growth is forecast to accelerate to 2% next year. What the Government has to do now is to underpin that growth and make it as job-rich as possible. This is the right time to give a further boost to national recovery.

We all know that the construction sector will not return to the levels of the bubble period, nor should it. However, restoring construction activity is vital if we are to reduce unemployment and get people back to work. That is why the Government has established a construction sector consultation and co-ordination group to identify the blockages to recovery in construction and set out a strategy for the industry. That strategy should include the goal of achieving a major increase in residential building activity in the next three years. Meanwhile, we will assist construction with the tax incentive for renovations and extensions introduced in this budget and by extending the Living City initiative. The additional capital spending announced yesterday will also add to the existing €17 billion capital programme and the PPP stimulus programme which is coming on stream. These will provide an important stimulus for the building industry

The domestic economy is vital to the creation of jobs and improving living standards. However, the country can only survive by making and selling goods and services that people in other countries want to buy. That is why the budget contains a further package of measures to support small business and particularly innovative start-ups. The Minister for Finance is also working to enhance the availability of trade finance. The budget provides support for people who are long-term unemployed and want to become self-employed. This is additional to the reforms being undertaken as part of Pathways to Work which is to help people back into employment.

I am pleased that the Minister for Finance has been able to retain the 9% VAT rate for the hospitality sector. This measure has been an important part of the recent success of the tourism sector, which brings jobs to every corner of this island. It is a vital regional stimulus and I want to record my thanks to the everyone involved in The Gathering, led by the Minister for Transport, Tourism and Sport, Deputy Varadkar, and including the staff of my own Department who worked so hard to make it a success.

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