Brian Ó Domhnaill (Fianna Fail) | Oireachtas source

I welcome the Minister of State, Deputy Harris, to the Chamber, and the Minister, Deputy Howlin, who was here earlier for this discussion. It is certainly an important discussion to have ahead of the budget, to reflect on where we stand and the fiscal space available to the Government. Of course, we are speaking about fiscal space because of the European framework that is now in place.It is moving from the corrective arm, which came into place in November 2011, to the preventive arm, which is to do with the debt and budgetary rules pertaining to what the Government can do in the forthcoming budget. The knock-on effect of that was the establishment of the independent Irish Fiscal Advisory Council, IFAC, which is doing an excellent job in merging the gap between Brussels and Dublin regarding surveillance of spending by government, Departments, local authorities and so forth. Those are the positives that have come out of the negative crisis we have emerged from and we now have surveillance beyond that available to a government. Irrespective of which party is in government, whether it is Fianna Fáil, Sinn Féin or Fine Gael, that external surveillance and the independent knowledge from the Irish Fiscal Advisory Council served the taxpayer well not only here in Ireland, but across Europe. I very much welcome that and I hope it will lead to the end of the boom and bust budgets we have seen in the past, which have resulted in negative consequences and political buying of votes using the taxpayers' money.

The Irish Fiscal Advisory Council made a pre-budget submission this year; it did the same last year. In that submission it spoke of a consolidation of approximately €1 billion. The Government did not listen to that and went to €2 billion. I am anxious to see what will happen this year. The Irish Fiscal Advisory Council is saying the €1.5 billion is at the upper limit and it believes the Government should move forward on a prudent basis, to use the council's own words.

One of the shortcomings in the structure in place in terms of the Irish Fiscal Advisory Council pre-budget submission, in the lead-in to the budget and even in terms of this discussion, is the fact that there should be a statutory obligation on the Government to respond to the pre-budget submission by the Irish Fiscal Advisory Council. The Taoiseach made flippant remarks recently about its submission to the effect that it is an issue for future governments to worry about. It will be an issue for future governments to worry about but it is also an issue for this Government to worry about in the forthcoming budget. There should be a statutory obligation on the Government to respond to the information provided by IFAC. That may be a shortcoming. Obviously, it is a political matter. Governments have democratic responsibility, and I accept that as a practising public representative, but at the same time something should be brought about in that regard.

Regarding the budget, the fiscal space was outlined by the Minister, Deputy Howlin, in his contribution. On the expenditure side, the split is about 50-50 between taxation and expenditure, which will allow for expenditure increases of approximately €750 million. There are many areas that require attention, and I have no doubt it will be a difficult task for the Minister for Finance going into the budget, but areas have been highlighted by the Irish Fiscal Advisory Council and other agencies regarding demographic changes to do with future pension provisions that need to be nailed down and addressed in the Budget Statement.

The improvement of the economy and the projected 6% increase this year was touched upon. That has to be welcomed but, unfortunately, it is a two-tier recovery. In my part of the country, Donegal, the recovery is not evident on the streets, in the retail sector or for the young people who cannot find a job and who are struggling to survive on social welfare. All of us can see the fruits of the recovery here in the capital and in major urban centres but that is not happening in rural Ireland. I hope the Government will take the opportunity to bring forward a package that will revitalise some form of a recovery in rural Ireland because it is not evident at the moment. There is no doubt that will be a challenge but it is also an opportunity. If I was part of a government going into an election, I would provide something to rural Ireland not necessarily by way of financial transfers in the State, but economic stimulus packages that would get people back to work in local areas rather than feeding into the Teagasc report, which stated that 60% of the population will live within 30 miles of the east coast by 2032. The Government, through policy intervention, must stop that happening because that would see an exodus of people from the west. That should not happen, and a policy intervention can change it.

I wish the Minister well. I have no doubt he will be busy in the coming weeks, and we look forward to the Budget Statement.