Brendan Howlin (Wexford, Labour) | Oireachtas source

-----does not agree to this. We cannot spend money we did not have. I am arguing for spending money we do have. I know the Sinn Féin position in 2011 was to tell the troika to get lost and take their money with them, which would have collapsed the economy then. Prudent management has got us to a position now where we can equally invest in the requirements of our economy going forward. That is the truth of it. This is sensible economics, not madcap economics.

Just because we had to do hard things in the past does not mean that is a permanent feature of our future. We would go further in the opposite direction. We would take €1 billion extra every year - as promised by Fine Gael and supported in an email I have received from the leader of Fianna Fáil - for the creation of this notional rainy day fund. From 2019 they will take an additional €1 billion out of the economy to put it in this ar eagla na heagla account, whereas we need money now. It is a fund that was argued for in the last election by no one else but Fine Gael, but is now being supported by Fianna Fáil.

We need to scrap the proposal for a rainy day fund and instead use that additional €3 billion - that is, €1 billion each year for 2019, 2020 and 2021 - to add to the €3 billion potentially available to us from the sale of AIB shares. We could therefore have an actual investment fund not of €2.6 billion but of €8.66 billion between now and 2021. That would make a significant difference. It would be an uplift for every part of our country.

We need to call a halt to the other feature of what I regard as the Government's folly in planning to impose a 45% debt ratio target on top of the rainy day fund. Under the strict fiscal rules, the debt ratio target is 60% of GDP. However, because we are close to achieving that, against all the odds when we were double that a few short years ago, the current Government, in what can only be described as an austerity fetish move, is now going to reduce the target to 45% of GDP. That is unnecessary and will do nothing but suck the money we need to built infrastructure out of the economy at the worst possible time.

We need to use the proceeds from the sale of any portion of AIB to further boost the amount of money available for investment, rather than simply to pay down debt. We need to front load the investment as much as possible, rather than reverting to pro-cyclical investment strategies. Above all, we need to see capital investment as providing real social benefits as well as economic growth, rather than creating a false choice for such investment.

If the Dáil and the Government accept the proposals, then instead of having €2.66 billion to invest we would have €8.6 billion to invest over the next few years. In summary, the pension fund, now the lSlF, is our rainy day fund. We created it as such and it is there. There is €8 billion in its directed portfolio and another €12 billion in a non-directed portfolio. That money is available to the State in the event of a crisis. The notion of putting another €1 billion a year as some sort of additional safeguard is false when we need the money now.

We believe that as the directed portfolio grows it should be made available for commercial investment in projects of national significance and commercial potential for our economy. We insist that the Stability and Growth Pact and the fiscal rules must be reformed and we are working to do that at European level. I have made this case to my colleagues in the Party of European Socialists and it has been accepted. They have established a working group to do that. I have asked all party leaders in this House to advance the same agenda within their own European political groups. I have asked the Taoiseach to do so with his EPP group this weekend.

In advance of all the necessary changes to the fiscal rules, there should be no thought right now of selling shares to simply retire debt. That is the least productive thing that can be thought of to do with €3 billion. It would take 1% off a debt that is falling anyway, which is fiscally meaningless. Instead that potential could be used to address the bottlenecks in which the country so desperately needs investment.

See this speech in context