Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank the Leas-Chathaoirleach and thank Senators for their contributions. The Minister for Public Expenditure and Reform, Deputy Michael McGrath, will be in the House for the afternoon to respond to other points Senators will raise in that debate.

I am going to respond to a point made by each Senator and thank them all for their contributions. While I will deal with individual points, it is important to frame the budget in terms of where we are collectively. It has become the case that many difficulties our country has faced in recent years have been framed in language that refers to emergencies and crises. That is because, for those who have been experiencing them, they are emergencies and crises. It is because of the care and solidarity we want to show to those in difficulty. Truly, with this awful disease in our midst and the prospect of the familiar difficulty of Brexit returning again, we are at a point without precedent. That is why the budget that was brought in yesterday by me and the Minister, Deputy Michael McGrath - the Minister of State at the Department of Public Expenditure and Reform, Deputy Ossian Smyth, played a very important role in it as well - brought forward the best efforts from three different political parties to try to create a framework within which our country can be safe. We truly are facing a challenge that does not have a comparison and that is why we brought forward a budget of the scale and scope we did yesterday. A number of measures in it in particular would have been unthinkable at the start of this year but are needed today.

Senator Casey talked about the need to try to give hope to many at the moment. Hope, as former US President Barack Obama once wrote in an earlier book, can sometimes be an audacious thing. It is an audacious thing at a time in which we can see many dark clouds ahead, despite it being a nice afternoon at the moment. What we were trying to do yesterday as a Government was to outline our view, which I believe is the view of the Oireachtas overall, that our country will get through this. It is our view that no matter how dark the day and how severe the challenge, it is something our country will overcome through a combination of the qualities of our people and of our economy and we will prevail. The budget sought to put in place a framework to allow us to do it.

In his contribution, Senator Norris touched on the international environment of the national decisions being made. He raised the very important issue of the way in which the financial system is organised across the globe. It is important to note that the attitude of the leading central banks across the world to this crisis has been fundamentally different to the position a decade ago. Within the euro area and within the European Union, the action taken by the President of the European Central Bank, Ms Christine Lagarde, was a fundamentally different approach to what was possible a decade ago. What President Lagarde did early on in this crisis was something for which it took her predecessors many years to build the consensus. It has made a fundamental difference to the national decisions that are now possible.

Senator Kyne touched on a number of different matters. In particular, he asked whether the increase in the VAT rate on the hospitality sector raised the revenue we believed it would. The answer to that question is "Yes". He also raised the issue of the change to the Stability and Growth Pact rules and what that means for the deficits we can fund at the moment. The European Commission has indicated that the rules that were there will be in abeyance for this year and are unlikely to be restored immediately next year, which in turn creates the flexibility for individual nations to respond to the challenge we face. What is crucial for Ireland, however, is that the level of deficit we have run for this year and are likely to run for next year is in the middle of the range when compared with other European countries. That is where we want to be. We want to be in a situation where the growth in our borrowing and our indebtedness does not make Ireland unique and that is not the case for us in Europe or across the world.

I wish Senator Gavan were here. In his contribution he made the point that yesterday, Sinn Féin looked to be balanced. That balance was absent yesterday. Perhaps there has been a change of tone for today because the party has realised that the budget we put forward will, like any budget, not be able to meet the needs of all of our country or the needs of every individual. No budget can do that, even that of yesterday, but what we have looked to do is to do enough for many to help them get through the challenges they and our country are facing at present. I note the Senator did acknowledge some positive aspects of the budget.

Senator Sherlock made a point on where we are with the childcare sector. She registered her disappointment regarding the developments in the budget yesterday. I emphasise, however, that the introduction of the wage subsidy scheme is probably the biggest economic intervention in the country's history apart from, arguably, the decisions taken to support our banking structure at the time of the last crisis.When the history of this period is written and we look back at all of the different changes that were made across that time, we will find that the Irish State, in effect, stepped in at one point to pay the wages of nearly 600,000 people. In essence, we used the creditworthiness that was regained very slowly to step in and allow the State act as an employer over a number of months. It is factually incorrect to say that a subsidy was cut from €410 to €150 per week. Under the temporary wage subsidy scheme, the maximum subsidy that somebody could get was €410. It is not the same as saying that everybody got €410. To go back to Senator Sherlock's point, in the current scheme we have deemed that the childcare sector can participate in that scheme regardless of what happens to turnover, which is an effort to respond to the issues touched on by the Senator.

In her contribution, Senator Moynihan touched on where we are with regard to housing. I would make the point to her that the 9,000 homes that will be delivered next year, in particular through our local authorities, represent the highest level of contribution that will be happening next year, given the likelihood that the private sector will, at that point, continue to face challenges in the delivery of homes.

Senator Higgins made the point that, in her view, we should be running a larger deficit for next year. Our deficit for this year is €21.5 billion. Our deficit for next year is, at this point in time, €20.5 billion. It is, in truth, probably a more moderate pace of deficit reduction than we could have aimed for earlier in the year, but we have had to make that choice because the virus is in a different place to where we would have hoped earlier in the year. We have to get the trade-offs right between how we manage deficit reduction and how we deal with the challenges we are facing at the moment. At that level for next year, we are well inside the range in comparison with other countries that are in similar circumstances to us.

A challenge to her argument is a point I frequently make, in particular to those on the left who make the case for more borrowing, namely, that those on the left who are making that case are very suspicious and critical of the powers of financial markets. At the same time, they look to deepen our dependence on those same financial markets by getting us to borrow more. That is not a path that I think is appropriate for our country. It is all about having a level of borrowing that is safe and never, in any contribution I have made recently, have I inferred that the difficulties of the last crisis were caused solely by levels of public expenditure that were too high.

I very much agree with a particular point Senator Martin made about the Government. We of course had a difficult start with regard to a number of different measures. This is, however, a stable Government that is responding to levels of challenge that few Governments have ever had to deal with. It has three different political parties that perhaps did not imagine that they would be in government in these circumstances. It has, at its heart, personal relationships that are good and trust that is growing, and we are working very hard to deal with the circumstances that we are now in. Decisions over recent weeks show that.

The time ahead is going to be a challenge. There may well be things that we have to do and decisions that we will have to make that will be challenging for many citizens. The three party leaders-----