Kieran O'Donnell (Fine Gael) | Oireachtas source

I am sharing two minutes of my time with Senator Colm Burke. I welcome the Minister of State, Deputy O'Donovan.

This debate is about the summer economic statement. It is a time to reflect. This will feed into the budgetary process this year and in future years. Putting this in context, we are at full employment. Who would have thought a number of years ago that we would be at full employment? We are operating a very small deficit of 0.1% and I would like to see that balanced. We should not be running a deficit. We are nearly there and I note the Government has given a commitment that it will not go beyond 0.1% of current deficit. We are bringing down our debt to GDP ratio. We are roughly at 66%, going down to 62% and, if I am correct, we will be at 63% by 2019. That slightly disguises the fact we have €206 billion of national debt, which people forget.

We have had such extraordinary growth in recent years that it has slightly disguised the level of debt we are carrying as an economy and it is something we have to look at. The average debt for every man, woman and child in Ireland is €42,000. That is above the average industrial wage. There are a lot of positives but there is still a bit of lumber there with our national debt and we must get it down. It is probably the accountant in me coming out but that prompts me to look at what lies behind the figures.Our debt to GNI ratio is at 100% this year and takes multinationals into account.

Side by side with that, our capital budget was historically low, but is now increasing and will total €7 billion next year. In the mid-west, the M20 got the go-ahead and will make a significant difference in terms of infrastructure. We need to build on that. Due to the fact that the economy has recovered we are able to put money into capital projects, but we have to think about the risks. The major risk to our economy at the moment is Brexit, which is outside of our control. We do not know precisely what the UK will do. I see no upside to Brexit. People have said our major trading partner is the EU, and that is probably the case, but the major trading partner for the SME sector is the UK. Ireland and UK produce and consume most of the cheddar produced worldwide.

The rainy day fund is extremely important and I wish to put it in context. If the National Pensions Reserve Fund was not in place I am not convinced we would have been able to come through the crisis. It was established for a different reason, namely, to provide for pensions, but it became a rainy day fund. If it had not been in place, the question is whether we would have been able to bail out the banks, which is something people should bear in mind. It has now evolved into the Ireland Strategic Investment Fund. We need to prepare for a rainy day.

I was first elected to the Dáil in 2007 and proposed a rainy day fund in one of my first speeches because I always felt that we needed to be cautious. We have good growth, but we must make sure it is sustainable. A rate of 3% or 4% is sustainable. If the country is reaching very high peaks consistently that is worrying and means something is fuelling the economy which may not be sustainable in the long-term. We have to ask those questions.

I wish to examine the economy on a sectoral basis. Tourism is going very well. Agriculture is going well, but has had difficulties in terms of fodder, milk prices and various other issues. It is an important element of our economy. Industry is going well. Over time the economy has to build on the SME sector. We have a very large and welcome multinational sector in terms of employment creation, but I would like the SME sector to become the future.

We have lagged behind in construction. There was a lost generation and we have lost skills. I spoke earlier today about the diaspora and putting the call out to people who have emigrated. When Ireland had a fantastic victory over Australia in the test rugby match many of us watched it in local pubs early in the morning rather than on television at home. The majority of people watching it in Australia were young. There is a skills deficit in the construction sector. Carpenters, electricians and plasterers need to come home from abroad and we need to upskill in that area. I very much look forward to the Government's publication on affordability in the housing sector. It is a missing piece of the jigsaw in the construction and housing sectors.

Funding of €2.6 million has already been committed and €3.4 million is available. We have to prioritise. The economy is functioning again and we have full employment, but we must ensure that we go gently because of Brexit. We must ensure that we steadily decrease our national debt figure of €200 billion.