Gerry Horkan (Fianna Fail) | Oireachtas source

I thank the Minister of State for his comprehensive opening statement. I do not intend to repeat much of it if I can avoid it.

I welcome the opportunity to contribute to the debate on the summer economic statement. It was released on Tuesday of last week and will form the basis for the 2019 budget, which it is hoped will be passed in October of this year.

The economic progress of recent years has been underpinned by the economic and political stability provided by the confidence and supply agreement between Fianna Fáil and Fine Gael and, while not ideal, Fianna Fáil has ensured that the previous two budgets have been progressive and prioritised improved services over further tax cuts.

We are now four months out from budget 2019 and it is important that in the lead-up to the budget we make the right decisions for the people who elected us and whom we represent. As it has done in the previous two budgets, Fianna Fáil will engage positively in discussions on the budget and will insist on tangible progress in the key areas of policy where the Government has thus far failed to make much of an impact.

According to the summer economic statement, €3.4 billion will be available for expenditure. Already, €2.6 billion has been pre-announced and committed to, leaving only €800 million for new budgetary measures. Last year, the Minister for Finance, Deputy Donohoe, said his utmost priority was to ensure there was a balanced budget. Unfortunately, that was not the case and the Government has failed to meet Ireland's medium-term objectives of a balanced budget in structural terms. That has impacted negatively on the resources available for 2019.

Fianna Fáil called for a rainy day fund and the proposal was very much part of the confidence and supply agreement. The fund will be allocated €500 million. It must be structured correctly and we look forward to engaging with the Government in respect of that. Unfortunately, Sinn Féin is not in favour of the rainy day fund and voted against the fiscal treaty. It is difficult, therefore, to listen to some of its Members speak on the issue. I am not referring to Senator Conway-Walsh, who is a fantastic committee colleague, but the outbursts of some of her party colleagues leave a lot to be desired. Sinn Féin argues that the European fiscal rules are sufficient to protect the economy and the State. However, by not investing in the rainy day fund and spending the money we would allocate to it, Sinn Féin would blow any chance of reaching or maintaining our medium-term objectives. Last year, it proposed €2 billion in extra taxes. It needs to explain how it would deal with a fall in tax revenues. Would it raise taxes or cut public services and public pay?

The confidence and supply agreement has ensured that the previous two budgets have been progressive and directed at those who needed it most. This marked a shift from the policies of the previous Government of Fine Gael and the Labour Party. The agreement includes a commitment to maintain our promise of meeting in full the domestic and European Union fiscal rules as enshrined in law. It also commits to address unmet needs and introduce budgets that will involve, at a minimum, a 2:1 split between investment in public spending and tax reductions and to maintain our 12.5% corporation tax rate, which is very important.

In 2018, the National Treatment Purchase Fund, NTPF, was allocated €55 million to tackle hospital waiting lists. We secured a 50 cents reduction in prescription charges for those aged under 70 and a reduction in the drug payment scheme threshold from €144 to €134. We also secured increases in personal assistance hours, home help hours and home care packages and agreed an additional €435 million for mental health services to achieve A Vision for Change service levels. All those measures need to be put on the record and remembered.

It is critical that budget 2019 continues to be progressive and delivers on tackling housing and health issues in particular. Despite healthy economic indicators, there are more than 3,500 children in emergency accommodation, rents are becoming increasingly unaffordable and the housing crisis is impacting negatively on our economy.

Waiting lists have never been as high, with 711,000 people on both inpatient and outpatient lists. Without the NTPF, those figures would be even higher. There is also an acute shortage of consultants and nurses. That must be addressed in 2019 to ensure services become available and accessible and are provided in a timely manner for those who need them. We need to improve and increase capacity in the public system but in the short term the Government must increase resources to the NTPF to make progress on waiting lists. At this stage it would not be unfair to describe them as out of control.

In the months ahead, we must have an honest and open discussion about where our priorities lie. We should examine resources in the context of the needs of the country and make the right decisions that speak to the priorities and issues facing people in their day-to-day lives.

Before anyone on the Government side becomes too annoyed with my contribution, it is important to acknowledge the many positive measures set out in the summer economic statement. Employment figures are up and unemployment figures are down but we need to address infrastructure. I said I would try not to repeat what the Minister of State said. As members of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, Senator Conway-Walsh, Senator Kieran O'Donnell and I examine the finances of the State in depth at meetings of the committee. The challenges the economy faces include the common consolidated corporate tax base, CCCTB, taxation of the digital economy, threats from Europe and, equally, our significant reliance on corporation tax, 80% of which is from foreign direct investment, FDI. Half of the FDI tax revenue comes from ten companies and while I hope all of these companies do very well, remain here permanently and pay increasing amounts of corporation tax, if one of them decided to leave Ireland or experienced a blip in its financial performance, the economy would be left exposed.

We need to invest in infrastructure while being careful not to overheat the economy, as the Minister of State acknowledged. It is very important that the rainy day fund is established for use when the economic position is less positive than now.

I congratulate and compliment the Minister of State on acknowledging that the debt-GDP ratio is falling, not because debt is declining but because the GDP figure is increasing so much. He acknowledged that GNI* is a better measure than GDP. When I raised that issue with the Minister for Public Expenditure and Reform, Deputy Donohoe, in the joint committee he told me he could not agree with me more.

Ireland is still one of the most heavily indebted nations in the world in terms of both public and private debt. We need to remember that when we make promises to the public because citizens will not thank us for spending money we do not have. We need to target the limited resources we have on housing, health, education and physical infrastructure to cope with the demands of our growing population.

I thank the Minister of State for coming into the House this evening to discuss the publication of the summer economic statement. I acknowledge the progress has been made, much of which can be attributed to the role of my party in developing the confidence and supply agreement. Equally, there are challenges ahead and I and my party look forward to working with the Government in the coming months to deliver the next budget.