Patrick O'Donovan (Limerick County, Fine Gael) | Oireachtas source

I begin by thanking Deputies for their contributions to the discussion on the summer economic statement. The statement published by the Government sets out our commitment to the fundamental principle of steady and sustainable improvements in living standards, underpinned by steady and sustainable revenue streams. It details the economic context and broad budgetary strategy that will underpin the forthcoming budget, which will be presented to the Dáil on 8 October.

The Irish economy has been in a phase of continued recovery, and this remarkable recovery should be recognised. A decade after the financial crisis we have placed the public finances on a sustainable trajectory and restored our fiscal credibility and international competitiveness. Today, there are more people in work in Ireland than ever before. Capital spending has been substantially increased, laying the foundation for future improvements in our living standards, and the growth in our economy is broad-based and robust.

This progress must not be taken for granted. It has been achieved, and will be maintained, through a prudent budgetary strategy. While we are entering a time of considerable uncertainty, because of the progress we have made we are approaching the challenges on the horizon from a position of strength.

At home, it is essential that we remain vigilant against the possibility of overheating as the economy closes in on full employment. Internationally, the global trading environment has deteriorated and the unprecedented situation of Brexit presents considerable risks for Ireland, particularly as the prospect of a disorderly outcome becomes increasingly likely. Whatever the eventual form that the United Kingdom's exit from the European Union takes, the two budgetary scenarios set out in the economic statement enable the Government to prepare for either eventuality. In an orderly Brexit, we will stick to the parameters set out in the stability programme update, crafting a balanced and moderate budgetary package that continues the Government's commitment to prudent financial management. In a disorderly Brexit, the Irish economy will be severely impacted, with output and employment adversely affected, particularly in the short term. As such, the Government will adopt a holding position, allowing the automatic stabilisers to provide countercyclical support and to increase spending on, among other things, welfare payments, and provide targeted support for the sectors most affected.

This year’s budget will take place under unique circumstances. As such, it is imperative that budgetary policy is geared towards enhancing the resilience of our economy. This is why the Government is targeting a modest surplus, prioritising debt reduction and establishing a rainy day fund. While we have come a long way in the last number of years, it is only by maintaining the responsible and sustainable budgetary approach that has delivered these hard-won gains that we can chart a course through these turbulent times.

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