Bernard Durkan (Kildare North, Fine Gael)
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9. To ask the Minister for Finance the progress year on year in the past five years towards achieving a stabilised economy, reduced borrowings and debt reduction; the extent to which the consumer has benefited or may expect to benefit from the progress made to date; and if he will make a statement on the matter. [37050/14]

Bernard Durkan (Kildare North, Fine Gael)
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My question relates to the degree to which the various economic and fiscal targets, year-on-year, have been identified and achieved in the past five years and the extent, if any, to which the consumer might expect to benefit from the achievements made to date.

Michael Noonan (Limerick City, Fine Gael)
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Following the crash of the credit-fuelled property bubble, together with the accompanying financial crisis, Ireland's economy experienced a sharp downturn, with a loss of almost 10% in real output between 2008 and 2012.  Immediately following the crash, a major gap in the public finances emerged. Through implementation of a substantial adjustment, significant progress has been made in restoring financial stability, fiscal stability and economic growth.  The economy and the public finances are now on a more stable footing.

Ireland's competitiveness has significantly improved in recent years.  Relatively low consumer price inflation in the past five years has meant that Irish price levels have fallen considerably, relative to the euro area. For instance, annual HICP inflation in Ireland has been below that of the euro area average for every year since 2008. This trend continued into the early part of this year, with inflation in the first six months of the year coming in below the comparable rate in the euro area.

Following a major restructuring and recapitalisation of the banking system, stability in the financial sector has been restored.  The Government recognises that the availability of finance is an essential prerequisite to supporting growth and employment in the economy. In this regard, it has taken a number of actions to assist in the financing of the economy through new and innovative products.

The underlying problems of the public finances are being addressed. The policy measures implemented by the Government have resulted in a decline in the deficit. This decline has been gradual and in a phased manner, consistent with the dual needs of supporting economic activity, as well as repairing the public finances. All of the interim deficit ceilings set have been met and Ireland is firmly on track to achieve a deficit of below 3% next year. This has been important in restoring Ireland's credibility. In addition, the debt-to-GDP ratio is estimated to have peaked and is now on a firm downward trajectory.

The immediate fiscal policy objective remains the achievement a deficit of less than 3% of GDP by next year, thereby correcting the excessive deficit. Thereafter, fiscal policy will be set in line with the requirement to move towards Ireland's medium-term budgetary objective, which is, a balanced budget in structural terms.

Bernard Durkan (Kildare North, Fine Gael)
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I thank the Minister for his comprehensive reply. To what extent may the consumer expect to benefit in the next five years as a result of the achieving of these targets and having regard to the performance in the past five years? Will the Minister give us his view on the extent to which the percentage of total debt will alter relative to GDP?

Michael Noonan (Limerick City, Fine Gael)
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The consumer benefits from low inflation and also from competition in the market. I understand there is significant competition between the supermarket chains, which has brought down the cost of the weekly shopping basket. The consumer will also benefit if future Finance Ministers have the capacity to reduce tax impositions or levies. The principal benefit for the consumer is that, as the economy stabilises, pay increases will become part of the norm once again. Already, I note that between 40% and 50% of private companies have given pay increases in the past 12 months. This trend will probably continue as the economy grows very strongly. The one word to describe everything that is happening is "normalisation" of the process. This is returning to being a normal economy where the normal rules apply. The consumer will obviously benefit in that sense.