Brendan Howlin (Wexford, Labour) | Oireachtas source

Over six weeks ago, this Government came to office amid a flurry of talk and promises of new politics. Today, we see the publication of the summer economic statement. In fact, I understand in five minutes' time the Minister for Finance and the Minister for Public Expenditure and Reform will make that announcement outside the House. It has been published without any consultation with the Members of this House. Indeed, Members of the House got to read in this morning's newspapers that €300 million is to be made available for additional tax cuts and €600 million, apparently, to be devoted to additional expenditure next year. According to the newspapers this morning, a total of €900 million, therefore, is to be made available in what amounts to the determined fiscal space, a sum which the Irish Fiscal Advisory Council has already described today as "contractionary".

We will have a contraction in our economy next year, according to the projections, or at least those that we read about in the newspapers. There is a train of thought among economists these days that because of the experiences of the past while, we should be very risk averse and that amounts apparently to prudence. An aversion to risk must not put at risk the very factors that we need to invest in our economy, if we are to continue to grow and continue to provide jobs for our people. That approach disregards the legitimate demands of the public that an improving economy will impact on their quality of life. We argued in the last election that a ratio of at least 2:1 should be allocated between investment and tax reductions.

The ratio should probably be more than that to deliver what we need, such as smaller classes, a functioning health system, indexation of welfare payments and so on.

There is a second aspect of today's coverage in the newspapers that also troubles me. We read today that the Government intends to press ahead with the idea of a rainy day fund. So when we have an urgent need for investment in infrastructure - whether it be broadband, schools, health services or roads - apparently the Government will effectively put money on deposit. Even if it could be used to pay down debt, it would be more reasonable than simply leaving money on deposit.

I have two questions for the Taoiseach. Does he accept that investment in urgently needed infrastructure makes much more sense than simply creating this so-called rainy day fund, which, in effect, is leaving money unused on deposit with the Central Bank? How does he propose to have cross-party buy-in to the budgetary process if fundamental questions about the fiscal space and the total sums to be deployed are made without consultation with anybody in the House?

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