Kieran O'Donnell (Fine Gael) | Oireachtas source

I hardly think so.

I welcome the summer economic statement. Taking an overall view, I approve of the approach taken with this particular summer economic statement in that it deals with Brexit, which is hanging over us. There is no point in saying otherwise. Brexit is a certainty, and there is now a strong possibility of a hard Brexit. We have to be prudent, and we have to be true to our policies as a Government as well. The economy is now back on a reasonably sound footing, we have a budget surplus for the first time in ten years, we have virtually full employment, with over 2.3 million people working, and our unemployment rate is below what would normally be termed full employment. However, our debt levels are still high, and we have to be cautious about that, in both the public and private sectors. Our debt levels are coming down, and while we have certainly seen a reduction in both public and private debt levels, particularly this year, it is something we must be conscious of.

Public investment in infrastructure projects stopped from 2007 onwards, and one would have to question whether that was the correct approach, in hindsight. It is important that we continue to invest public infrastructure. Design and planning of the M20 motorway is under way, and a 60-bed block is being built in University Hospital Limerick, which is hugely important. Flood relief projects are happening up and down the country. Senator McDowell referred to public transport, and I would be hugely supportive of both our rail network and other networks. That feeds into the whole issue of climate change and our carbon footprint, which is something we have to look at. We also have to be conscious that our indigenous exports sector is hugely dependent on the UK, so if there is a hard Brexit, there will definitely be implications for us in Ireland, and we have to prepare for it in that way. Equally, a soft Brexit would make it much easier.

This summer economic statement effectively presents a picture of a balanced budget, full employment, a doubling of capital investment, and having a proper programme back on board, but it also presents the risks, which relate to Brexit and the level of increase we have seen in corporation tax. There is a body of work within the Department and we have to look at that in terms of long-term structure. We are also looking at the climate plan, with carbon taxes rising up to 2030, and insurance as well. I am conscious of striking a balance, and I have a fundamental view on that. I do not believe someone on €680 a week should be paying a marginal tax rate of 50%.I do not believe so. Equally, we have to look after people who are less well off, including social welfare and carer's recipients. This is the balance to be struck by Government. We also have to put money aside. Senator Horkan mentioned the rainy day fund, which we debated recently in the Seanad. There was almost unanimous support here, explicit or implicit, for the overall objective of the rainy day fund. There will be €2 billion in a rainy day fund by the end of this year, which is a significant amount of money. We are moving into the territory of counter-cyclical budgets. If the economy is showing signs of overheating, we must put money aside for a rainy day.

If there is a hard Brexit, the Government will have to support people exporting to the UK, including in terms of jobs and a multitude of other areas. A hard Brexit will bring various problems. A disorderly Brexit would involve a headline deficit of between 0.5% and 2.5% and a swing of up to €6 billion, which could have significant implications for us. However, all that is outside of our control. The British Parliament will decide on the type of Brexit it wants, which is conditional on a number of factors, including who will be the new leader of the Tory Party and Prime Minister. However, it is important to remain positive. The majority of MPs are not in favour of a no-deal Brexit. We have to hope that this will bring realism and common sense to the Brexit issue. Ireland and the UK are inextricably linked.

I welcome the summer economic statement. I agree with Senator McDowell that we must maintain control over spending. Equally, we must ensure we give breaks to hard pressed families across a range of areas. It is a balancing act. The outcome of the Brexit process in the UK, our nearest neighbour, will have huge implications for us. It is a terrible shame that the UK is leaving Europe. The UK was an ally for Ireland in various discussions and negotiations in Europe. I do not believe there will be a rethink. Rather, I think there will be a Brexit. The only question is what form it will take. This summer economic statement deals with the realities of what is unfolding in the UK in front of our eyes. We must be prepared. This document goes a significant towards that end.