Maria Byrne (Fine Gael) | Oireachtas source

I welcome the Minister of State, Deputy Eoghan Murphy. In recent years, the State has been confronted by some of the greatest economic challenges with which it has been obliged to deal since its inception. It is a testament to the legacy of the previous Government and the resolve of the current one that I stand here today to discuss a very positive set of plans for the Irish economy. Following the decision by Britain to leave the European Union, we must ensure that our economic recovery is preserved and sustainable. We must avoid the mistakes of the past. Our public finances are in a much better position than they were during the years of the crisis and they have been placed on a sustainable path. The era of boom and bust is never coming back and has been confined to the dustbin of history.

The strengthening pace of the economic recovery has confronted us with the next set of challenges which require the full attention of Government, such as investing in our education and health systems. We must remember that every challenge presents an opportunity. The profound recovery in our economy is most evident in the labour market, with unemployment having been cut in half since the high of more than 15% in 2012 to an eight-year low of 7.8% in 2016. Our budget deficit has declined sharply from one third of economic output at the height of the crisis in 2010 and our national debt is in freefall having declined from 120% of GDP in 2012 to just less than 94% in 2015.

I welcome the fact that the economy is predicted to expand strongly by 4.9% of GDP this year and 3.9% next year. This rate of growth will ensure that our public finances continue to meet the needs of an expanding economy. I welcome the fact that the budget deficit is expected to fall by 1.1% of GDP this year and that it will be completely eliminated by 2018. The challenge ahead is to ensure that our public finances remain on the right path towards sustainability and durability. The fact that the Government has committed to a medium-term budgetary objective of 0.5% of GDP is positive. The national debt is always shouldered by those who come after us and it is neither fair nor desirable that our children and grandchildren would be obliged to pay for the recklessness of our generation. Keeping growth in Government spending below the rate of growth in the economy is an example of the prudence with which this Administration is operating. This will ensure that we do not spend more than is reasonable.

In terms of spending on education, we face many challenges in providing a decent education for all our citizens. The continued growth in the Irish birth rate will require the Government to build and provide more primary and secondary schools. As more and more students choose to study at third level, we face a real dilemma in funding our third-level institutions in order to maintain our world-renowned standard of education. The Government's capital plan for 2016 to 2021 outlines €42 billion in capital expenditure. It is my hope that within this plan we can put the resources needed in place to provide much-needed school places and refurbish many school buildings throughout the country. As part of the programme for a partnership Government, the Government has committed to spending and additional €6.5 billion on public services by 2021. This will be instrumental in allowing extra teachers to be hired, thereby leading to a reduction in class sizes and allowing for an increase in the number of special needs assistants and guidance counsellors in schools.

I would like to conclude by looking at taxation. It is welcome that the Government has committed to a programme of income tax reform. The economic justification for lower-margin tax rates speak for themselves. Lower rates of taxation encourage entrepreneurship and innovation, which is responsible for a considerable amount of job creation in Ireland. The phasing out of the USC will mark another positive step in making work pay. The USC was an emergency tax for a time of crisis. Now that the crisis has passed, it must be reduced and, ultimately, eliminated. Middle-income earners have shouldered the burden of our economic crisis. They have seen a reduction in the public services offered by Government while having to contribute more in taxation as a result of the prices.

In an increasingly competitive international environment, it is important that we have a competitive tax system that not only encourages foreign direct investment but also encourages our people, with their broad range of skills and expertise, to stay here and contribute to the ongoing economic recovery. Taxation receipts continue to beat expectations and are currently running ahead of the profile for the year. This clearly proves that there is ample opportunity for us to reduce tax on work and give the hard-earned fruits of the economic recovery back to the Irish people. I thank to the Minister of State for listening and I certainly look forward to contributing to the debate later.