Gerry Horkan (Fianna Fail) | Oireachtas source

I thank the Minister of State for his opening statement. Much of the heat surrounding the summer economic statement arose in discussions when it was published yesterday. I read some of the contributions made in the Dáil yesterday evening, in particular those of spokespersons and the Minister for Finance and Public Expenditure and Reform, Deputy Donohoe.

Brexit is the most obvious issue that arises. If Brexit goes well, we might be alright but if it does not and there is a no-deal or hard Brexit, the potential swing in the public finances will be from a €1 billion surplus to a €5 billion deficit. As the Minister of State noted, this is a movement of about €6 billion. The Irish Fiscal Advisory Council has noted that between €3 billion and €6 billion of the €10.5 billion of corporation tax receipts is relatively unstable and not guaranteed in any sense. There are, therefore, uncertain and potentially choppy waters ahead. That is not to take away from the positives. We have almost full employment and we ran a surplus last year for the first time. Fianna Fáil is involved in the confidence and supply agreement and has played its part in facilitating the minority Government. We are doing our bit to make sure everything goes as well as it can. The National Surplus (Reserve Fund for Exceptional Contingencies) Bill 2018 was passed last week with the unanimous support of the House. The rainy day fund is a positive measure which featured in my party's manifesto in 2015. It was also part of the confidence and supply agreement and I am pleased that, as part of its agreement with Fianna Fáil, the Government has secured the rainy day fund. That the fund will have €2 billion in it by the end of this year is a positive.

We also have challenges in how we manage capital projects and expenditure. We are seeing constant overruns in health year on year. Last year, the overrun was approximately €650 million and we also have overruns in the national children's hospital and national broadband plan. Only €200 million of the €2.8 billion available in the fiscal space will go towards addressing those overruns. We are, therefore, kicking some of the problem down the road. We need to find significant resources to fund projects such as the children's hospital and the national broadband plan in the long term. The Minister says there is €2.8 billion of fiscal space, of which he has committed €2.1 billion. Some people have pointed out that the latter figure does not include the Christmas bonus, which would eat up €300 million of the fiscal space. Others argue that the €2.1 billion figure includes the Christmas bonus. I ask the Minister of State to indicate whether the bonus is included in the figure.

We need to remain cognisant that corporation tax receipts account for much of our revenue. I welcome our revenue from corporation tax and would be delighted if it was €20 billion or €30 billion. The way to avoid overdependence on corporation tax receipts is to have an increasing number of companies paying the tax because that would reduce our dependence on particular companies. The Minister has announced a review of corporation tax, which some people would prefer to have done externally. I understand the Minister's rationale for doing it internally and possibly having it independently validated.

The Irish Fiscal Advisory Council has pointed out significant issues with the national finances. It noted the pitfalls of Brexit, the €645 million overrun in the Department of Health last year and that Government spending in 2018 breached the expenditure benchmark laid down in domestic and EU fiscal rules. The Government claims that no project will be impacted by the overruns in the national broadband plan and the children's hospital but projects will clearly be postponed and delayed.

It is very much the case that we do not know what will happen. The summer economic statement outlines the history and points out how well we are doing, relatively speaking. While that is valid, in addition to the €2.8 billion of fiscal space, we may need to borrow up to €6 billion if Brexit goes badly. With every passing day, the likelihood of a no-deal rather than an orderly Brexit increases. The fiscal space is small in the context of having to borrow if Brexit goes wrong.

It is important that we have stability and that is why our party will support a budget, subject to the parameters outlined between Fianna Fáil and Fine Gael in the confidence and supply agreement. That agreement has delivered many measures, including 1,600 new gardaí, an increase in the old age pension and a boost to third level funding. I will not list them all because they are well documented. I wish the Minister of State, the Minister for Finance and Public Expenditure and Reform, Deputy Donohoe, and the Government the best as they deal with Brexit in the uncertain times ahead.

Corporation tax receipts, while very welcome, are very unstable. We keep finding extra money which allows the Minister to avoid borrowing or cutting services to fund overruns. At some point, the curve will go the other way because we will not keep finding additional corporation tax revenue, much as I would like that. Equally, interest rates are at a historical low and the national debt is costing us less to service than it ever did. If interest rates change at any point, the Minister may not be as lucky or fortunate as he has been thus far.

Members of both Houses need to be cognisant of the figures and committed to examining them. I did not like the note on the Government's website that the summer economic statement gives the Dáil an opportunity to examine the figures. No reference was made to the Seanad. The website could have at least referred to the Oireachtas. It is true that the Dáil passes the budget but the Seanad is also discussing the summer economic statement. The finance spokespersons are present and a number of Senators are on the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. There is a role for this House in debating the statement, as we are doing now. Maybe the language of the Department will reflect that in the long term.

Fianna Fáil is facilitating the Fine Gael-led minority Government, subject to the confidence and supply agreement. We have secured various measures within that but I am concerned about corporation tax and capital and revenue overruns. I wish the Minister of State and the Government well in tackling those issues.