Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

As in the case of any policy change, a future Government will have the ability to change it, be it a policy to a build a school or a hospital or to increase or reduce taxes. I know that the Minister, Deputy Michael Noonan, was trying to save the blushes of the Taoiseach earlier this morning, but these issues, in the context of the figure of €1.5 billion involved, deserve more than an attempt to save the blushes of the Taoiseach. We should be asking ourselves if accepting a medium-term objective of 0.5% is the right thing to do in the interests of the country. This is a policy change and the way we need to judge it should be based on the risks the country will face in the future.

On paper, the economy is doing very well. I note from the data that in terms of GDP, our growth rates are outperforming those of countries such as India. However, behind these figures are issues unique to Ireland. We know from economists who study the performance of the economy that the GDP figure is not a good reflection of where we are as a country. Looking at the headline figures for investment one would form the view that investment in Ireland was growing, but when one gets into the detail, one discovers that the basis for it is that a small number of multinationals have located intellectual properties in ireland, which has bumped up the figures. If these are stripped out, it shows that there is a lack of investment in the country. There is a major problem in that while these multinational corporations provide much needed employment here and some tax receipts, although not enough, this skews the figures for overall GDP which then also causes major problems when we are considering how the resources of the economy should be divvied up.

One thing that is very clear from the document is that one can see the trend in the next few years in total expenditure and tax revenue based on a no-change policy. One can see that it will go from 32.8% of total revenues in relation to GDP last year to 29.4% in 2021. They are the tax revenue figures. What the Government is planning to do and what Fianna Fáil want to do is reduce that figure further. When the Taoiseach says he wants a taxation stimulus, like that in the USA, he does not need to worry as the Government already has it. We have lower taxes than in the USA. The Government is already projecting a figure of 29.4% based on a no-change policy, yet it wants to reduce taxes further and reduce the resources that come to the State.

Expenditure last year was at a figure of 35%, which based on a no-change policy in the next five years would go to 26.6%. Of course, some of the fiscal space is going to be used to increase expenditure and there will be demographic and other pressures. The problem is that, even with that fiscal space available, we are going to see expenditure levels as a proportion of GDP reduced.

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