Mairead Farrell (Galway West, Sinn Fein) | Oireachtas source

I am sharing time with Deputies Pearse Doherty and Brian Stanley.

Gabhaim buíochas leis an Aire agus an Aire Stáit as an méid a dúirt siad. Ní fhéadfaí beag is fiú a dhéanamh de thionchar an coróinvíreas ar ár n-eacnamaíocht, ár bpobal agus, ar ndóigh, ar shaol na cosmhuintire. Cailleadh daoine le linn na paindéime seo, chaill teaghlaigh a n-ioncaim ar fad agus níl a fhios ag go leor daoine céard atá i ndán dóibh. Teastaíonn infheistíocht inár ndaoine, inár ngnóthaí agus inár bpobal. Cinntíonn infheistíocht níos airde go gearrthéarmach costas níos ísle eacnamaíochta agus sóisialta go fadtéarmach.

It is hard to overstate the devastating impact Covid-19 has had on our economy, our communities and people's lives. We have heard this pandemic and our battle with this virus being likened to a wartime situation and I think that language is fitting. Families have lost loved ones, whole households have lost their incomes, and many people have no idea what the future holds. These unprecedented times have required us to take the kinds of drastic measures that would be unheard of outside of a wartime situation. The various income support measures that were introduced have been essential in keeping the economy going, keeping people in jobs and preventing the mass immiseration of people. However, many feel they have been completely forgotten during this pandemic, such as the people who have gathered outside this building on Kildare Street and on Merrion Square; the taxi drivers who protested outside yesterday; the Debenhams workers, about whom we had a robust debate earlier; carers and many others. We are in extraordinary times and it is worth noting that when the Revised Estimates were debated in May and additional expenditure was sought, we knew that much of it had already been spent. That is reflective of the extreme fluidity and uncertainty of the situation in which we are living.

Voted spending is now well above pre-pandemic forecasts, with social protection and health naturally accounting for the lion's share. While on the face of it this might seem shocking in magnitude, it is matched in scale only by the level of the crisis . Higher expenditure in the short term is necessary to avoid long-term social and economic devastation.

I recognise the Government having taken on board much of the constructive criticism that has been made by me and colleagues and the various anomalies we have highlighted, especially in income and business supports. Several of the shortcomings we highlighted were addressed, such as our work to increase the subsidy for low-paid workers under the temporary wage subsidy scheme and to include SMEs that were initially excluded from grants. There are, however, ongoing issues with the lack of an appeals process for the PUP and the eligibility for certain groups, including artists, musicians and others in the entertainment industry. We have heard how difficult they have had it in contributions this evening and through the various representations made by that sector to all of us in recent days. There is also the fact that under the new EWSS, employees with gross weekly income of less than €152 per week will not be eligible for any subsidy. It is still my hope that these issues, in addition to the many others we raised, will be recognised in the forthcoming budget.

We know that on the path ahead the fiscal rules have been abandoned and no timeline for their reintroduction has been proposed. Restrictive rules for government spending at a time of unprecedented crisis are a recipe for disaster, as the period of harsh fiscal austerity clearly demonstrated. The Irish Fiscal Advisory Council, an institution known for its cautious conservatism, has forecast that our deficit will fall dramatically over the next five years, and that is without the need for austerity measures. The programme for Government states that budget 2021 will set out a medium-term roadmap detailing how Ireland will reduce the deficit and return to a broadly balanced budget, but this phrasing concerns me slightly. Surely the Government has learned the lessons of the previous crisis. Past Governments have tended to have a poor record on counter-cyclical spending and have often reflected that old Charlie McCreevy mantra of "When we have it, we spend it, and when we do not have it, we do not spend it."

Deficit reduction should not be the guide for our economic policy over the medium term. What matters now is not the size of our deficit but the sustainability of our debt. We know from the financial crisis that the victims of premature deficit reduction are always infrastructure and public services, and times such as this pandemic show how vital these services are and how much more vulnerable a lack of investment made us when battling Covid-19. I acknowledge that the Minister stated building a healthcare system that can cope with Covid-19 is no easy task but that it is one we must meet, and I hope that will remain crucial to any further spending decisions. It would be a more progressive and pragmatic strategy for the Government to adopt the golden rule approach to budgetary spending, whereby the Government borrows to fund capital investment projects that will benefit future generations by enhancing accessibility and facilitating trade, improving mobility, generating greater employment opportunities and boosting overall economic productivity.

We need to remember that investment is not a cost but something that can increase our productive capacity and boost future growth. This was done in the late 1980s and helped to reduce our debt-to-GDP ratio by almost 50%. The major difference is that today we can borrow to fund this capital investment at historically low rates and it would be negligent not to do so. Last week, the National Treasury Management Agency, our debt management agency, sold €1 billion worth of bonds at a negative rate of 0.098%. This essentially means investors are paying the State to borrow their money. It offers a significant opportunity for major capital investment projects that can put people back to work in good jobs with good pay and addresses serious deficiencies in housing and health that have spanned numerous Governments, helping to bring about more inclusive growth that will shrink our debt as a proportion of economic growth.

The Minister stated last week that this should be an investment-led recovery and I agree. This certainly seems to be the approach taken by some member states. The French President, Emmanuel Macron, has just announced the France relaunch stimulus programme, which proposes €100 million in spending on jobs, businesses and large environmental capital projects. Earlier this summer the German Government announced plans for €40 billion in green projects as part of its €120 billion stimulus package. We need to replicate this in our own right.

Some commentators in the Irish media have tried to downplay the severity and scale of the economic crisis. They have sought refuge in our headline GDP figures, which demonstrated the lowest year-on-year decline of all EU member states for the second quarter. We shed less than 3%, whereas Spain's GDP shrank by a whopping 22.5%. As my colleague, Deputy Doherty, noted last Tuesday, when examined from a jobs point of view, which should be the real measure of resilience, we exhibited the second highest number of job losses, narrowly losing out to Spain. How can we be the best performing economy in terms of GDP and yet second only to Spain, the country with the worst rate of job losses? I do not wish to go into the details because we all know the issues with using GDP as a measure of the health of the economy, but recent data from the Parliamentary Budgetary Office show that, to date, annual corporation tax receipts have outperformed forecasts, with August receipts being 31.5% higher than the same period last year. This is being driven mainly by the multinational sector, with the likes of big pharma and big tech taken into consideration, but we should not forget that SMEs account for more than 99% of active enterprises in the State and almost 70% of employment. This sector is struggling. As a recent Economic and Social Research Institute report showed, almost 50% of SMEs do not have enough cash reserves to cover one month's expenses, so it is little wonder that Ireland is currently the worse EU country for investment.

A simple way of measuring investment within the economy is to look at gross fixed capital formation, which is a component of the expenditure method of calculating GDP and includes spending on the likes of plant machinery, equipment purchases, land improvements, and the construction of railways, roads, residential dwellings and industrial and commercial buildings. It takes account of how much is being built and the kinds of productive assets that help bring about even more production. According to European statistics, we are the worst in this class. Gross fixed capital formation has fallen off a cliff, which means we are currently the second worst in the EU in terms of job losses and the worst in terms of investing in production. This is where the State needs to step in, not merely with current spending but also with capital expenditure.

Tá sé soiléir dúinn ar fad go bhfuil dúshlán mór romhainn. Baineann an dúshlán sin le cúrsaí sláinte, eacnamaíochta agus sóisialta. Tá go leor plé déanta againn ar na himpleachtaí atá ag an ngéarchéim seo ar mheabhairshláinte na ndaoine. Nuair atáimid ag déileáil leis an bhfadhb seo agus ag iarraidh athshlánú eacnamaíochta a dhéanamh, ba cheart dúinn a chinntiú go bhfuil na daoine agus na pobail i gcroílár chuile shórt atá á dhéanamh againn. Nuair atáimid ag cruthú postanna maithe a íocann go maith, ba chóir dúinn a chinntiú go bhfuil siad sna ceantracha éagsúla agus ní hamháin sna cathracha. Sna blianta atá amach romhainn, agus muid ag breathnú siar ar an bpaindéim seo, tá súil agam go mbeidh Stát níos cothroime againn ná mar atá againn anois.

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