Peadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

I would like to register a protest regarding the level of surveillance this country has come under. I know the Minister, Deputy Humphreys, mentioned that such surveillance is a good thing but I think it is a good thing when the democratic wishes of the people are fully reflected in economic policies rather than being qualified by eurocrats and other unaccountable people who are neither aligned to our economic interests nor accountable to the Irish people.

This process is worse. Owing to the eternal Fine Gael and Fianna Fáil negotiations the stability programme update has been directed by Ministers without a mandate and written by faceless civil servants to the expectations and demands of unelected eurocrats.

The Taoiseach said earlier that in terms of what is provided for in this document it is a case of business as usual; no change, which is a far cry from the Government using last year's document as a publicity exercise with regard to the spring statement. It was like a press statement on steroids in advance of the general election, the purpose of which was to put the Government into good light before it had to go before the people. Unfortunately, it became a damp squib at the time.

For me one of the most significant issues not debated in this Chamber but debated among people in academia is the fact that we are dealing with measurements that are inaccurate. The saying "You can't manage if you can't measure" comes to mind. There is broad agreement outside of this Chamber that Irish GDP levels are not reflective of economic output and that there are huge distortions in the economy with regard to income flows to non-residents, particularly profits, and dividends to foreign direct investment enterprises. GNP is also suffering. GNP is understood to be a better measurement of the income of the State and has in recent times been about 20% less than GDP. However, there is a distortion arising in that particular metric as well due to the trend of large American companies to headquarter in Ireland for tax reasons. A further distortion in the figures arises out of foreign firms booking foreign manufacturing in Ireland for tax avoidance purposes, in other words, contracts manufacturing. Michael Hennigan of Finfacts, who has done a good bit of work on this, believes that of the estimated €250 billion worth of export value for 2015, half of it is fake, with €60 billion related to the double Irish tax dodge used by companies such as Google, Microsoft and Oracle, etc. and the remainder coming from contracts manufacturing.

These are not theoretic distortions. They are significant and real distortions which muddy our ability to properly measure and analyse the development of our economy and create major problems with regard to many other metrics that we use. The issue of debt to GDP ratio is often discussed. If GDP is an inaccurate measurement of the economy then our debt to GDP ratio is inaccurate. We also discuss the level of investment in education with regard to GDP, which, too, is inaccurate, as is our level of health service provision and taxation with regard to GDP. The whole process of economic debate in this State is in itself distorted due to the fact that we do not have the necessary measurements.

Last year, the finance committee, of which I was a member, discussed the issue of corporation taxes and the reason they were so far ahead of profile. I asked the chief economist of the Department of Finance to explain the reason for this and while he gave a few peripheral reasons as to why that could be the case it was obvious the Department of Finance did not fully understand why corporation taxes were so ahead of profile at that time. It is shocking that we do not have the tools in this State to properly measure the economy and, therefore, properly take the policy decisions that would derive from those measurements. This is not just a theoretical or statistical distortion. The economy is distorted. There is no doubt but that there is a massive over-dependence with regard to exports towards foreign direct investment. Foreign direct investment maintains the bulk of our exports in this State. This leaves us fiercely exposed to external shocks, such as fluctuations in exchange rates, interest rates and oil prices and are not matters within our control. The election of Donald Trump as the President of the USA would have an adverse shock on Ireland's economy.

There is also a huge imbalance or distortion with regard to the size of Irish businesses and enterprises. In comparison with the Danish and Austrian economies Ireland has a small cohort of large to medium-sized enterprises. We also have a small cohort of indigenous businesses that export. This causes major problems. It is estimated that of the €250 billion of exports only €30 billion comes from internal exports. This leaves the Irish economy and jobs massively exposed to shocks. One of the first responsibilities of the incoming Government is to ensure that these issues are resolved such that we do not have an imbalanced economy, as we did a few years ago.

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