Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I thank the Acting Chairman. I also thank, on my behalf and that of my colleague, the Minister, Deputy Howlin, all Senators from all sides of the Seanad who took the opportunity to engage in this pre-budget debate, which has been very useful. I certainly found it very thought provoking and we had quite an honest debate. In my time in the Chamber today, I have heard a number of trends being repeated, which is always a good indication of what people are highlighting as priority areas and issues that they want the Government to consider in the context of the budget, which is in just under two weeks. I will endeavour to respond to some of those points.

The first point is there has been budget reform. I take the point made by Senator Healy Eames and accept her conviction on the issue, as I heard her speak about this passionately before. I fully accept her bona fides in that respect. Nevertheless, I must outline that there have been some budgetary reforms, although that does not mean we are finished with the process. We have already seen a number of these reforms introduced by the Government, with the core concept being the principle of openness and transparency, which allows for clearer accountability and oversight. One of the first actions taken by the Government in 2011 was the implementation of a medium-term budgetary framework to enhance the management of public expenditure. This new framework, along with two comprehensive reviews of expenditure, which considered every cent of public expenditure, provided an opportunity for discussions to move away from consideration of short-term issues to broader strategic debates.

Elements such as the public spending code and value for money policy reviews are well established at this stage and aim to systematically analyse departmental expenditure. The establishment of the Irish Government Economic and Evaluation Service, which could be considered in this House at another time, means that we can examine, from an economic evaluation perspective, how public funds are being spent in each Department. It is a welcome measure. We have introduced performance budgeting, which provides a link between funds allocated, key outputs and performance indicators of each Department. Coming into this budget, two of the most exciting reforms are the development of the spring economic statement and the national economic dialogue. With the spring economic statement, we now have more data than ever before at the disposal of every Member of this and the other House, and at the disposal of the public, in order to have an honest debate. As a result, we have moved to a space where I think - I am open to correction - there is almost a political consensus in terms of the fiscal space available.

When I attended the national economic dialogue in July with the Ministers, Deputies Noonan and Howlin, I was struck by the fact there were many stakeholders from society attending the event. These included people doing superb work in non-governmental organisations, representatives of the trade union movement and the business community. We had an honest exchange about the priorities and almost everybody, if not everybody, had the discussion in the context of the Government having a limited pot of €1.2 billion to €1.5 billion. The discussion was on how to divide that pot, which in itself was a good development.

Some of the debates at the national economic dialogue, which was streamed live for every citizen in the State to see, were very useful. I will make a point on the tax side. I was little disappointed that some of the national economic dialogue was a discussion about tax merely as a redistribution tool. Redistribution is an important element of tax and I fully understand the concept of taking from a group and giving it to another. However, tax also has another role to play, particularly when a government or a political consensus wants to arrive at full employment. Tax can be used as a tool for economic growth and job creation. I have heard references to the ESRI report this morning, which I note, but there are elements of the ESRI report in the spring economic statement which indicate that if tax on work is reduced - the reference is universal social charge and income tax - one can help create more jobs and increase productivity. We saw this with the 9% VAT rate, and if we put in place targeted tax measures, this may not just be an argument from the past about Robin Hood and distribution but rather about economic growth as well. It is a point worth making.

There is a bit of a phoney debate that goes on from time to time and I am grateful that we did not seem to have it in the House today, or at least not while I was present. That debate is about whether we look after the economy or society. I am sure this will come into sharp focus in the run up to the general election. I can get very frustrated at home at the weekend listening to the radio discussions when people say the Government only cares about the economy and what about society? I challenge anybody in the House or a commentator in the media to explain how to deliver the society these people talk about at great length without having a functioning economy to deliver it. The economy is not an end in itself but a means to an end. It is a tool or a vehicle but we must ensure that we do not engage in fanciful politics and economics, telling people we are favour of this, that and the other but we are not in favour of this tax, that tax or the other tax. People should not say they are not in favour of water or property taxes while promising that they can make all the services better. The people will not be conned by that so we need an honest debate in that regard.

I will briefly touch on some of the tax issues that were raised. With regard to the self-employed, the Minister for Finance, Deputy Noonan, and the Taoiseach are already on record as saying they intend to examine that area in the budgetary context. It is important that as we move further into a period of economic recovery and growth, we should ensure that we can create an entrepreneurial society. To tell people to set up a business but penalise them on the tax side when they do that seems anomalous and unfair. We cannot eradicate the problem in one budget but we can begin that process; I hope we will do it in the budget.

The Department of Finance has recently concluded a tax and entrepreneurship review and a very good document has been published, which is still on the Department's website. It asked a number of questions, including what we are doing that is damaging the possibility of entrepreneurship, the supports in place for working entrepreneurs and what supports are in place that no longer work or which are no longer needed. If these are no longer needed, should we tweak or abolish them and what new supports should we introduce? It is a very good document and we have received over 40 submissions from interested stakeholders. The Minister and the Government will reflect on them in the budgetary context.

As the Minister, Deputy Noonan, has said, we are moving from the idea of "if I have it, I will spend it", which led to boom and bust. We are going to keep to strict parameters, and as Senator Healy Eames and others have said, this means that priorities will have to be picked. I do not have a costing to provide an iPad for every child in the country because there is no intention to give an iPad to every child in the country. My understanding is the Minister was talking about the need to move in the direction whereby our children and our schools can be equipped for ICT.