Richard Bruton (Dublin Bay North, Fine Gael) | Oireachtas source

I welcome the opportunity to have this debate. I would say, particularly to new Deputies, that no Deputy in this House has a monopoly on compassion. Elected Members from all sides of the House have come here with a mandate to try to do the best they can for their people. We all see the challenges in housing, mental health, education and in trying to provide jobs for our people. We all also know that the country has come from a difficult place and is on a journey we need to sustain.

We need to look at the needs of a strong economy and of delivering services to people as two sides of the same coin. The truth is that looking at our budget situation today, we do not have any resources to spend on new programmes. It will not be until 2018 that we will see a balanced budget. If we look at the economic success we have had in the past five years, with 142,000 people back at work, the tragedy of that success is that although it generated €10 billion in recovery, 75% of that money had to be put into filling the black hole that was left by the crash. We must recognise that we are a small and open trading economy and to survive and grow in that environment, we must be able to win new export markets.

It is interesting to look at this stability report in comparison with the one in 2011 when the Government entered power. The contrast is dramatic. At that stage, we were borrowing 10% of GDP but that is now down to 1%. Borrowing in the open markets was costing us 14% but that is now down to under 1%. We had just lost 300,000 jobs in our economy but now we have created 140,000. This is not being complacent about the future but recognises that we have rebuilt, not on the old fault lines of construction and so on that caused the crash, but on new sectors such as IT, food and tourism, sectors with a strong sustainable future.

It is interesting to compare the stability report with the report of 2011 and the forecasts for where the country would be in 2015. We have made significant strides and come out much better than forecast. The investment rates are more than double what was predicted in 2015 and the rate of increase in exports has more than doubled. The number of people at work is 63,000 more than was expected. We have to realise, however, that sustaining this progress is not going to be automatic. It has been hard work winning export markets and rebuilding confidence that sees investment at such high levels. There is a real danger that people will think that because the economy is growing at very healthy rates, suddenly we are back to where we were in 2008, but that misses the point, dramatically and in many ways. Deputy Eamon Ryan touched on this. We have a had a decade of lost investment. Had we been able to sustain the levels of public investment at between 4% and 5% of GDP we would have had nearly €15 billion more invested in the hardware of public services such as the transport system. We are now seeing a recovery in investment which is very welcome, but the notion that this recovery can now be cashed in and paid out, in extra pay and other things, misses the point. Three quarters of the new growth has come from investment in the past two years. In the stability update, healthy growth is forecast for the next two years and nearly three quarters of the new growth will come from investment, but these investments are the seed potatoes of the future. They are not to be consumed now as if they were disposable income. We are trying to fill a lost decade and create the framework and necessary underpinning to continue to create jobs. It is really important to understand this. We will try to create the drivers of long-term sustainable growth, on the back of which we will be able to build in line with the ambitions we all share. The work I am doing is to make sure every person can find a job here. Getting back to full employment is a hugely important vision, on the back of which not only will we restore dignity to 200,000 people and give them a chance to create a home of their own and have stability in their lives and a stable outlook on the world, but we will also create the resources to invest in the services that were sadly lost in the decade that has passed.

We need to create a virtuous circle, as described by the Competitiveness Council. The achievements of the public and private sectors in the past couple of years are reflected in the fantastic work being done with diminishing resources in the public sector and the fantastic work being done in the private sector, especially in the new technologies and research and development in food and other things. There is a virtuous circle if we can build on these new achievements to deliver higher living standards for everyone, with more resources for public services and more jobs, but if one tries to do it in reverse by starting with spending the fruits of the money and paying ourselves more before we deliver the new achievements, sadly the virtuous circle will go into reverse. This is one of the things we learned from the crisis - in the economy which was built in 2000-07, 66% of new jobs were in the construction sector and public services and we were attempting to build and spend our way to economic progress. This time around 45% has come from exports, compared to only 1% of jobs from new export markets back then. We have a much more balanced economy and can look to the future with a great deal of confidence on the basis of where we now stand, but we need to make sure we continue to build the virtuous circle by achieving the new output in both the public and private sectors on which we will be able to build.

I have been in this House a long time and seen two occasions on which there were opportunities. The first was when we joined the European Union when there was a great opportunity to leap forward, but policymakers made the wrong decisions to go for a public spending approach to the economy, leading to a dramatic crash in the 1980s. The second was after we had joined the eurozone when the very same phenomenon occurred, namely, cheap money in the economy. This led both the public and private sectors to decide they could borrow that money and spend to build living standards without the underpinning of a strong economy. These visions came crashing down on both occasions, with huge destruction of people's livelihoods and prospects and huge emigration followed. It is important that we understand the resources we need to build a better housing system, a better mental health system or better health services and so on have not yet been created.

People talk about fiscal space. It is about running two things in tandem, namely, creating the strong economy that can deliver resources and investing well in mental health, education and health services. We have to keep these two horses together, in harness, as they are two sides of the same coin. I heard Deputy Seamus Healy trot out the same stuff we have heard so many times before to the effect that, in some way, the European Union owes us by writing off our debt and that if only we tapped into 1% of the population, everything would be solved.

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