Enda Kenny (Mayo, Fine Gael) | Oireachtas source

Just over four years ago, in the face of an unprecedented crisis, a new Government was formed with a mandate from the Irish people to fix the public finances and get the country working again. We can all remember the depth of the crisis that then gripped the country. The economy was in freefall, banks were on the brink of collapse, thousands of jobs had been lost, Ireland's international reputation was in shreds and the country was in a troika bailout. Many in the Opposition believed the position was hopeless and ending the bailout, rescuing the economy and saving the country were impossible challenges. Deputies on the Opposition benches stated we should default, leave the eurozone and abandon 40 years of Irish economic progress in Europe. Instead of turning its back on the scale of the unprecedented challenge, however, the new Government, working with the people, faced up to the crisis and adopted a clear plan to stabilise the economy and turn the country in the right direction. The plan was not easy as it involved taking very difficult decisions that were painful. However, people displayed great patience and resilience during the crisis and thanks to their sacrifices and hard work, Ireland is recovering, the bailout is over and the troika has gone home.

After a lost decade of economic hardship, a new and more sustainable period of prosperity is within our grasp. This is confirmed by the analysis of the economy contained in the spring economic statement published yesterday. While the recovery is still incomplete, Ireland is recognised as the country with the fastest growing economy in the European Union. While the job of repairing the public finances is not fully complete, Government borrowing has been significantly reduced and interest rates on our debt have reached all-time lows. While too many people are still out of work, unemployment fell to 10% today from a high of more than 15% and employment levels are at their highest since 2009. While the small business sector still needs more support, exports and manufacturing output by Irish and foreign-owned firms are at an all-time high.

This is solid progress but it is not enough. For most people, economic statistics mean very little. Many people do not yet see or feel the benefits of the recovering economy in their daily lives. I hear their stories every week. Too many families are still struggling to make ends meet, pay their bills and meet their mortgage repayments. Too many people are still out of work and too many families are missing a family member who had to leave the country to find a job elsewhere. Growth rates and deficit targets are of little consolation to people in such circumstances. We must be clear, however, that we are more interested in the future than in the past. Families know the recovery is fragile and want and deserve a solid foundation on which to plan their future. Everybody remains nervous about the risks ahead and the danger of slipping back. With banking union and the new fiscal rules that apply, the Government has created conditions that will make it very difficult for this to happen.

My commitment to the Irish people is that, under this Government, we will never go back. For this reason, we set out in our spring economic statement a plan for the years until 2020 which will secure and strengthen the recovery. At the heart of this strategy is a commitment to protect the hard-won restoration of national competitiveness and stability in the public finances. By doing so, we will ensure that more and more people in every part of the country start to experience the economic recovery in their daily lives. Job creation will, therefore, remain the Government's top priority as without more jobs, little else can be achieved. More jobs provide more people with purpose, financial independence and an opportunity to provide for their families and contribute to their communities. They generate the resources needed to fund better services and reduce taxes on those at work and give brothers, sisters and children who had to leave Ireland in search of work an opportunity to come home.

The plan sets out four clear job-related targets. First, in the coming months, the Government will deliver, one year earlier than expected, the target it set itself when it took office of adding 100,000 new jobs. While this is good progress, it is not enough. Second, by next year, more Irish people will return to take up employment that will leave the country. Families will be reunited and hopes will be restored. Third, by 2018, we will have replaced every job lost by the previous Government during the recession with new and more sustainable jobs. Finally, by 2019 there will be more people at work than ever. In this way, our plan will bring the country back to full employment, keep it there and ensure that everyone who wants a job will be able to get one.

To achieve these targets the Government will assist businesses to add at least 40,000 new jobs this year and roughly the same number in 2016, 2017 and 2018, respectively.

These targets are ambitious and can only be achieved by a Government that continues to make the right choices, one that protects the solid foundations that are being laid, one that continues to reduce the burden of taxation on enterprise and employment, one that continues to improve Ireland's attractiveness as a place for businesses in which to invest and expand and one that ignores the calls from the Opposition for a return to the reckless tax-and-spend polices that destroyed the public finances during the past decade.

Our plan targets a steady growth of between 3% and 3.5% per year, not a boom and bust situation as pointed out by the Minister for Finance. Steady growth of this nature will eliminate the remaining deficit and bring government debt to below the average European level without any new taxes or new charges, while also allowing for tax cuts for working families, targeted improvements in education, child care, health services and in front-line policing. We can never go back to the “when we have it, we spend it” attitude to budget management of previous Governments. We need to avoid repeating Fianna Fáil’s mistake of making reckless spending commitments that then have to be painfully reversed. Our plan caps annual spending growth below the underlying growth rate of the economy. If that particular rule had been applied between 2000 and 2007, the sustainable growth in public expenditure would have been halved, leaving the public finances in a much stronger position to protect our people from the impact of the credit-fuelled property boom and bust.

The reckless commitments made by Fianna Fáil when in government, as well as the rest of the Opposition in recent weeks, suggests they have learned little from the mistakes of the past. Given that Deputy Martin was a leading member of the Government that made these mistakes which blighted the prospects of a whole generation of Irish people, this is quite unforgivable. Deputy Martin has yet to learn that what was unsustainable during his term in office, namely public sector hikes without reform, the narrowing of the tax base, the proliferation of quangos, cost hikes for small businesses, a welfare system that perpetuated joblessness and poverty, is still unsustainable now. We are never going back to that lack of oversight, wanton waste of public moneys and blatant disregard for our international reputation that brought this country to the brink under that Fianna Fáil Government. The reform of the budgetary process, including the addition of this annual spring statement that sets out the broad direction needed for growing the economy and repairing the public finances, means that we are never going back to show-time politics budgets, designed by Fianna Fáil focus groups, which destroyed our prosperity. Our plan ensures a fair sharing of the benefits of the recovery with those already at work.

There is welcome evidence that private sector employers are once again agreeing sustainable pay increases with their staff. Yesterday, the Minister for Public Expenditure and Reform, Deputy Howlin, announced the Government’s decision to commence discussions with trade unions on the issue of public service pay. All public servants have had their pay cut significantly and most are also working longer hours. The size of the public service has been reduced by 10% at a time of growing demands for these services. I want to acknowledge the too often unsung sacrifice and contribution that our nurses, gardaí, teachers and civil servants, as well as other public servants, have made not only to national economic recovery but also to keeping our society and our State strong at a time of unprecedented crisis. As the economy recovers, it is right the Government opens up the prospect of gradual and sustainable pay recovery for public servants from 2016 onwards, linked to continuing reforms to improve public service efficiency and effectiveness. In this way, we will ensure that pay awards do not come at the expense of services for the general public.

The Government’s plan offers fair rewards for hard work, not quick profits from speculation. It is wrong the Government still takes more than half of every extra euro in any pay increases for hundreds of thousands of low and middle-income families in both the public and private sectors. The universal social charge, USC, was introduced by Fianna Fáil as an emergency penal tax on low and middle-income families. This Fine Gael-Labour Government has begun and will now accelerate its phased abolition. In our first budget, we removed 330,000 low-income families from the USC. In the last budget, we removed an additional 80,000 low-income families from the USC, cut the two lower rates of the charge and removed those on the minimum wage from the higher rate. In the next budget in October, we will bring to 500,000 the total number of low-income workers that we will have removed entirely from the charge. Following the income tax cuts introduced earlier this year and consistent with the statement of the Government priorities agreed last July, we will cut the 7% rate of USC on all of those earning less than €70,000 per year. We will also end the unfair tax treatment for the self-employed and small businesses, starting in the next budget with those self-employed people on lower incomes.

Strong growth and jobs are funding tax cuts on working people. Less tax on work means, in turn, more jobs. In that sense, the central goal of our economic plan is to reinforce a circle of rising living standards, lower taxes, increase job creation and improve public finances. The Opposition parties propose the reverse with higher taxes on incomes, jobs and enterprise, putting at risk all the progress the people have made. They call for higher corporate tax rates that the Department of Finance claims could put at risk over half of the 175,000 jobs created by foreign direct investors in our country. They also call for a reversal of our income tax cuts at the cost of losing 20,000 new jobs, higher employers’ PRSI, risking tens thousands more jobs, a reversal of our welfare and labour market reforms, putting at risk the reductions in unemployment achieved in recent years which is epitomised by the 10% unemployment rate announced today down from 15%.

In contrast to those propositions from Opposition parties, the Government’s plan will also ensure work pays more than welfare while reducing the numbers of working people and their children experiencing poverty. We will deepen the reforms to welfare and labour activation systems that give people who can work a hand up rather than never-ending handouts. After the Low Pay Commission makes its first recommendations in July, the Government will respond with a package of measures to address them in the October budget.

There is renewed optimism in our country, an optimism for which there is a strong basis. The recovery that Ireland is now experiencing can be just the beginning of a more sustainable, authentic and fairer phase of long-term economic and social development and prosperity for our people. If secured and strengthened, the recovery will translate into real improvements in our people’s day-to-day lives, more jobs, more security, more money in their pockets and better services. There are, however, risks to our recovery outside of our control from economic developments in the eurozone to instability in Eastern Europe and the Middle East. By far the greatest threat to our continued recovery comes not from Greece or Ukraine but from the economic amnesia of some Members, from those who have learned nothing from the mistakes in the past and those who would repeat the same mistakes, from those who want to once again narrow revenue base and hike up taxes on workers and investment and from those who want to go backwards rather than forward.

For the next year, this Government, Fine Gael and the Labour Party, will continue to work day and night to secure the recovery in the people’s interests. At the next election, the people will judge whether we have fulfilled the mandate they gave us. They will have a clear choice between a stable and coherent Government that will secure and strengthen the recovery or chaos and instability.

It is a clear choice between moving forward or risking the country's progress to those who wrecked it in the past, or those whose policies would clearly wreck our future. I do not want, and will not stand for, Ireland to be dragged back to the failures of the past, or for our country's progress to be ruined by those who are intent on blowing a huge hole in our recovering national finances. Populist promises to reverse every tough decision are nothing but empty rhetoric, irresponsible leadership and downright bad politics. They are not the solution to these problems.

Working together, the Tánaiste, Deputy Joan Burton, and I lead a strong and stable Government. We know from other countries that hard-won stability and progress can be too easily reversed. This Government will never again allow mistakes to be repeated. We continue our work to secure the recovery and strengthen its impact on the daily lives of our people. In due course, they will judge whether or not we have fulfilled the mandate they gave us.

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