Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Sustainable public finances are essential for the continued progress of our country. The careful management of how we spend the taxpayers' money has played a vital role in stabilising our public finances, with the underlying Government deficit for 2016 estimated to come in below 1% of our national income.

The Deputy will be aware that the economy continues to improve. The Central Statistics Office figures show the economy grew by 5% last year and unemployment fell to 6.4% in March.

Improving budgetary conditions in recent years have allowed the Government to allocate additional resources towards its emerging needs, with Government expenditure increasing on average by approximately 3% per year since the end of 2014, with the prospect of continuing that rate of growth into the coming years.

Departments are managing the figures so far this year inside available resources. We have resources for next year, which the Minister, Deputy Noonan, emphasised again today and on which I made a number of points during the day, but once we pay for the full year cost of our social welfare changes and honour commitments on tax reform, the net amount of resources available to the State are approximately €500 million inside what is defined as fiscal space. That means we will need to make very careful choices regarding how we spend that money next year.

It strikes me that if we consider where our economy is now, in 2007 we had 2.1 million people at work. In 2017, we will have 2.1 million people at work. In 2007, we had tax revenue of €47 billion. In 2017, the corresponding figure is €51 billion. In many cases, therefore, our public finances and our labour market are now back to where they were a decade ago. Our deficit and borrowing requirements are not back to that point yet but in other areas the economic indicators are back.

We have a clear choice ahead of us. We know what happened to the economy after 2007. We saw the huge damage that was inflicted on our country and the pain caused. To make sure we do not go through that again, we need to be sensible about the way we increase expenditure in the coming years, accompany that with reform to make sure we spend money better and then make wise choices regarding the way we manage tax in our country. If we can do that, the prospect of being able to increase spending by 3% each year and accompany that with reform year after year will offer our country a great chance to deal with the issues Deputies raise in this House every day.

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