Michael Mullins (Fine Gael)
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I welcome the Minister of State, Deputy Simon Harris.

Simon Harris (Wicklow, Fine Gael)
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I welcome the opportunity to discuss the spring economic statement which was agreed by the Government and unveiled last week by the Ministers for Finance and Public Expenditure and Reform. The spring economic statement sets out the progress made on economic and budgetary matters since the Government took office just over four years ago. I believe and think the people believe these achievements have been significant. Let us reflect for a few moments on the achievements made in the past few years.

Economic growth is now stellar. The economy grew by 4.8% last year, the fastest rate of growth in Europe. The current forecast is for a growth rate of 4% this year, which is likely to be near the top of the European growth league table again. Importantly, the recovery has been jobs rich. An additional 95,000 people are in work in Ireland since the low point in mid-2012. We can often get lost behind figures and data. However, that means that 95,000 people are now bringing home a pay cheque to the family who were not in a position to do so in mid-2012.

Unemployment has fallen by over five percentage points since its peak and is likely to dip below 10% in the coming months. The jobs lost during the crisis are being recovered in a very real way. By the end of 2018 the Department of Finance is expecting that all of the jobs lost during the economic crisis will have been replaced. The economic downturn meant that some of Ireland's best and brightest had to leave the country in order to find work. The recovery is set to reverse this trend, with a return to inward migration from 2017 onwards. We can now begin in earnest to ask our young people and the not so young who felt they needed to leave these shores to come home again.

The public finances have been put on a sustainable footing, with the deficit set to be well below the 3% target for this year. Debt levels, while still too high, are on a firm downward trajectory and set to move towards the European average in the next few years.

As a result of the huge sacrifices made by the people since the crisis, the Government is now in a position to implement another mildly expansionary budget this year and every year to 2020, if deemed appropriate. The spring economic statement sets out a strategy designed to put an end to the failed boom and bust model of the past. Instead, a continuation of sensible medium-term focused economic and budgetary policies will secure sustained and balanced growth in the remainder of this decade. The statement is just one part of a much broader reform of the budgetary framework. The next phase in the framework is the national economic dialogue when the Government and relevant stakeholders will discuss the most effective and equitable way to achieve our objectives. Discussions will be based on the imperative of fiscal responsibility and what is in the long-term best interests of the people. No longer can the economy be run in election cycles. The new structures will ensure policy-making will be consistent with broader societal and economic objectives.

Turning to the economic situation, I am greatly encouraged by the latest data which show that the recovery is gaining momentum, with the economy growing at the fastest rate in Europe. It grew by 4.8% in 2014 and is forecast to grow by 4% this year. As a result, real GDP is set to exceed its pre-crisis peak by end of the year. In the remainder of the decade our forecasts indicate the economy has the capacity to grow by around 3% to 3.75% per annum, with positive contributions from both exports and domestic demand. The economic recovery is perhaps most clearly evident in the labour market where we have now had nine successive quarters of employment growth, representing an increase of 95,000 jobs since the low-point of the crisis. Encouragingly, the latest data show that employment gains have been driven by increases in the numbers of full-time positions and that the recovery is broad based, with 11 of the 14 sectors of the economy seeing employment gains. As a result, the Government's highly ambitious employment target of 100,000 additional jobs in 2016 will be met one year early. These figures are testament to the continued success of the Government's An Action Plan for Jobs which will help to ensure there will be more people working in Ireland by 2020 than ever before in the history of the State.

The spring economic statement highlights the Government's continuing focus on job creation. It highlights sector-specific interventions, for example, in hospitality, tourism and construction. Sector-specific strategies also play a vital role in ensuring Ireland's continued competitiveness and attractiveness as a location for inward investment. For example, in my own area of sectoral responsibility last month the Government launched its new strategy for international financial services. The IFS 2020 strategy sets out an ambitious target to increase the number of people employed in Ireland's IFS sector by 30% in the coming five years, representing a net increase of 10,000 jobs.This is just one example of how Ireland's economic development will be driven in the future by sustainable growth in high value-added sectors of the economy.

Historically, there were fewer than 60 people employed in international financial services, IFS, companies in Ireland during the late 1980s. Today, there are more than 35,000 people directly employed in IFS companies, with thousands of more jobs indirectly supported. IFS is now a truly national sector of the economy, with significant numbers employed outside the IFSC, across Dublin city and county, and in numerous regional locations such as Cork, Galway, Limerick, Kerry, Waterford, Kilkenny, Louth and Donegal.

Growing the numbers employed in IFS by 30% over five years is a highly ambitious but achievable target and one that the Government aims to achieve by implementing our new strategy in full. This strategy sets out a long-term vision for Ireland. To help realise the vision we have set five strategic priorities and 30 concrete actions and we are already getting on with the body of work of implementing these. I outline this to the House because IFS2020 is an example of how Government is focused on driving growth across all sectors of the economy. This strategy is matched by a number of other strategies in important areas of our economy, where we plan to continue to grow jobs and real economic growth in the coming years.

Putting the public finances on a sound and sustainable footing has been the main priority of this Government since taking office. Prudent management of the public finances is essential to support economic growth and ensure that there will be no return to the boom and bust model of the past. The people have suffered too much from that and have had enough. To that end, the Government set out a series of fiscal targets to bring down the deficit in a credible and controlled manner and, I am pleased to say, the Government has overachieved each and every year on this target. The deficit in this country fell from €15 billion in 2011 to €4.5 billion this year. The Department of Finance is now forecasting a deficit of 2.3% of GDP in 2015, with Ireland set to exit the excessive deficit procedure by the end of this year. This could not have been achieved without significant reductions in public expenditure. For instance, last year gross voted expenditure amounted to some €54 billion, a reduction of over €3.4 billion from 2011. During that period, current spending was reduced by over 4% and capital spending fell by 23%. These reductions had to be made at a time of increased demands on public services, particularly in the areas of social protection, health and education.

To ensure that expenditure was better managed and that these demands were met, the Government implemented a series of reforms. Reforms include the introduction of multi-annual expenditure ceilings, regular comprehensive reviews of public expenditure to make sure we are getting value for taxpayers' money, the publication of the updated public spending code, the implementation of performance budgeting initiatives, and the establishment of the Irish Government Economic and Evaluation Service.

The European Union fiscal rules will serve as a tool to help us responsibly manage our recovery. The key lesson that we have learnt is that increases in spending must be commensurate with increases in growth. We cannot be spending more than we are bringing in in growth. Public expenditure must be sustainable. We must use evidence-based decision making to ensure that our investment maximises value for money and growth in the longer term, while also, crucially, ensuring that we protect the vulnerable in society.

A new set of rules will apply from 2016 onwards, which will require us to make progress towards a balanced budget in structural terms. These rules are designed to ensure that fiscal policy enhances economic growth and macro-economic stability. As the Minister, Deputy Noonan explained last week, the Government has secured agreement from the European Commission to a change in the application of the rules. This is a really important development for our country. As a result, fiscal space of the order of €1.2 billion, and up to €1.5 billion, will be available for tax cuts and public expenditure increases in budget 2016. Our partners in government have also agreed that the fiscal space will be split evenly between tax reductions and investments in public services. That is a prudent approach at this time. Our forecasts indicate that a similar amount of space will be available in later years, while still ensuring the achievement of a budget surplus before the end of the decade. In other words, as a country, we can afford to reduce the burden of tax on work by in and around €640 million this coming budget, the budget after that and the budget after that one. This amounts to nearly €2 billion worth of tax cuts on work, while investing, at the same time, in crucial front-line public services.

Reducing the debt remains a key objective of this Government. Putting debt on a firm downward trajectory will enhance the resilience of the economy to shocks of any origin and help ensure a sustained recovery in the years ahead. It will also better position Ireland to manage demographic pressures over the coming years. The Government has already made significant advances in reducing the burden of debt through reducing the interest rate on the European loans provided under the programme, securing agreement to extend the maturity of the European loans, replacing the promissory notes with very long-dated Government bonds and replacing just over €18 billion of IMF loans with cheaper market-based funding.

When we came to Government, we were told by our predecessors that we could not change one full stop in the IMF-EU bailout programme. This is proof that we did it and continue to do it and, as a result, the cost of servicing that debt has continued to fall with interest rates on ten year Irish Government bonds now at effectively historic lows. The debt-to-GDP ratio will continue to decline as the recovery continues and is expected to fall to 100% of GDP by the end of 2016, converging towards the EU average in the years ahead. Of course, our net debt position, which takes account of the cash the NTMA is holding and other assets, is much lower. We have improved the cashflow for this country over the next decade by about €40 billion as a result of the successful negotiations that this Government has undertaken with its international partners.

As my colleague, the Minister for Public Expenditure and Reform, Deputy Howlin, set out last week, our improved fiscal position means that we will look to increase gross voted current expenditure by an additional €600 million to €750 million for 2016. This will allow us to manage demographic pressures and to make crucial investments in key public services. This is something I am sure Senators on all sides of this House will welcome.

Ireland's general population has increased by nearly half a million in the past decade. We have the highest percentage of people aged under 15 in the European Union. Life expectancy has also risen and now almost 13% of our population are over 65 years of age. By 2021, this will have increased by close to 40% from a decade earlier. While positive, these changes present challenges for our public services in terms of looking after our young people and giving our older people dignity in their older years.

In the health area, demographic changes will cost an estimated €200 million per year over the coming years. The cost of paying for the two main State pension schemes alone is projected to increase by €200 million per year out to 2026. This Government is committed to maintaining the State pension. In education, the number of school children is set to increase every year over the next six years. By 2021, we will need an extra 3,500 teachers at primary and secondary level to provide education to an additional 50,000 pupils. These are quite astonishing numbers. The number of third level students is also projected to increase by 20,000 in the same period. As a country and as a Government, we need to plan to ensure our public finances can meet these demographic challenges.

Thanks to the hard won economic recovery, we are now in a position to increase investment in our infrastructure. We will do this in a strategic way by ensuring maximum value for money and focusing on future needs. The new capital plan, which will be published by Government in June, will identify priority areas for investment in key areas that will increase our capacity for growth and our ability to respond to social needs.

We believe that that the quality of our education system is a key determinant of future living standards. In the lifetime of this Government, over 150 new schools will have been built. We are providing higher education programmes and services for almost 164,000 full-time students at third level and 270,000 places on further education and training programmes. We will continue to ensure the continual development of our workforce to allow our citizens to be at the forefront of new technology and the creation of high value jobs.

I think everyone would acknowledge, and rightly so, that we now have a considerably more efficient and productive public service. I pay tribute to all of our public servants and civil servants. These are our teachers, nurses, gardaí, people working at the front line day in, day out, who have had to continue to reform and, in many cases, to do more with less. They have done so with great dignity and great dedication. Public service reform has allowed us to provide additional resources to front-line services, including nurses, gardaí and teachers. The Minister for Public Expenditure and Reform, Deputy Howlin, described this as the reform dividend.

Last week Deputy Howlin announced his intention to commence discussions with the trade unions on the issue of public service pay. All public servants have had their pay reduced significantly. These reductions were made on the basis of financial emergency legislation. As the economy recovers, we need to ensure that remuneration and the cost of the public service more generally are managed to ensure that they remain sustainable. We need to acknowledge that by working together with our public service unions we managed to negotiate public sector pay agreements in very difficult times. Now, as a country, when we are in a better time, we need to continue that process of constructive engagement and dialogue in order to plan for the future. The hard-won gains of the last four years must not be put at risk by the tax and spend policies of the Opposition. As the Minister, Deputy Noonan, explained last week, lower taxes on income will support more jobs. That is what this Government began to do in the last budget, it is what we will do in the next Government and it is what the Opposition voted against. Higher taxes will cost thousands upon thousands of jobs. The Government will continue to support job creation through a reduction in income tax and USC in the next budget and in future budgets if re-elected. It is vital that the prudent and sustainable pro-growth budgetary policies of this Government are continued to secure a lasting improvement in living standards.

We cannot repeat the mistakes of previous governments. Renewed prosperity must be on the basis of responsible government and strategic investment in the productive capacity of our people. The Irish people deserve no less. We must learn the lessons of the past decade and not repeat the mistakes that brought us to ruin. The spring economic statement outlines a roadmap for us to follow. We owe this to the Irish people. I look forward to the debate.

Brian Ó Domhnaill (Fianna Fail)
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I welcome the Minister of State to the House. This debate gives us an opportunity to reflect on the Government's recent announcement, the spring statement, which focused on expenditure and income from a public finance point of view. I apologise at the outset for being a little late. I was at another meeting. Earlier, we had a discussion in the House and I spoke to the Leader on the need for a vision for the country and how we spend our money going forward, whether on the revenue or capital side. We need to set a plan for the country, and to involve the people, in terms of reducing the deficit or spending any additional revenues that may become available as a result of increased tax revenues as a result of people returning to work with a consequent reduction in the strain on social welfare. Every citizen should be involved in that.

The spring statement was a good document, but there was nothing new announced in it. In reality, it is probably a springboard to accelerate the Government into an election cycle. Having said that and having read the statement, the Government will depend on citizens if it is to include everyone in the recovery and to reap the fruits. I was taken aback that entrepreneurs and entrepreneurship was not mentioned at all in the document. Self-employment was only cited once. I have a copy of the document here. I do not understand that as we should be trying to promote an indigenous entrepreneurial spirit within the country. As such, I was taken aback that the self-employed were not mentioned. Part-time workers who are in a crucial category in terms of upskilling and setting up their own businesses were only mentioned twice in the document. Again, we are depending on people to lift the country forward, yet these two cohorts of workers and entrepreneurs were only mentioned in passing.

The Minister for Finance, Deputy Noonan, referred to the need to be prudent and to the outlook for various expansionary budgets, as he termed them, between now and 2020, depending, of course, on revenues being made available. The Minister spoke of an increased availability of resources of between €1.2 billion and €1.5 billion for the 2016 budget. He spoke about a 50:50 split in terms of that money coming from tax revenue and savings. It does not make a lot of sense and I would like an explanation. If one looks at where we have been heretofore, the projection does not stack up. It has not been 50:50 to date. In fact, the deficit reduction was brought about in the 2014-15 fiscal cycle by a 50% increase in taxation, 4% GDP growth, a 9% reduction in Government expenditure and 27% from other factors.

Job creation and wealth creation are key to the future economic prosperity of the country. I fully agree with the Minister of State that we need to create a culture of allowing people to work. We need to cut the burden on those who are self-employed to give them a cushion for taking risk. We must cut tax burdens across the board to try to get the entrepreneurial spirit motivated. In doing that, we must ensure that the benefits of prosperity are shared by all irrespective of where a person lives or to what social class he or she belongs.

Unfortunately, that is where the Government is getting it drastically wrong. There has been a non-existent focus in Government spending on the regions. Any economist will tell one that for every €1 spent by the public sector, the private sector will spend at least €1.30 on top of that. If the focus of Government expenditure is the capital and other cities and not the regions, we will not have economic development in the regions or balanced regional job creation. We saw in the recent NERI report that 94,000 jobs were created over a 12 month period, of which 95% were created in Dublin or the commuter belt.

John Gilroy (Labour)
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That is not true.

Brian Ó Domhnaill (Fianna Fail)
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That is a fact and it was set out in a report written by Dr. Michael Collins of NERI. This well-researched document, which I have read, was dismissed last week in the House by the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton. I went back and researched the document again. It is a factual report based on actual facts from the Central Statistics Office. I do not know why Deputy Bruton questioned the figures given that they come from the CSO and are Government figures. They are not my figures or NERI figures; they are from the Government.

In the north west region, zero jobs were created by the agencies while a number were created in the south east. My point is that the focus of economic growth is Dublin and its commuter belt. That is wrong. We need a balanced regional development strategy for the country which includes the north west, the south east and south west. If that does not happen, the emigration cycle that has hollowed out rural Ireland will continue. People will continue to leave not only to go abroad but to go to Dublin. That is not necessarily a bad thing, as we need a strong Dublin. Members spend half the week in Dublin and it needs to be strong. We all support having a good, strong capital city, but we must ensure that the forecast by Teagasc and the CSO that 60% of the population will live within 25 miles of the east coast by 2025 does not come to pass. That cycle must be broken. The only agency that can do it is the Government through its various bodies. The Government must decide to ensure that the west, south west and south east are important. If we continue with the cycle as it is going, the vast majority of the population will live within 25 miles of the east coast.

There are many areas on which we could touch, but there is an equality issue at the core of recovery. We could go into the definition of "equality" in terms of deprivation indexes, Government figures by agency, etc., but we do not have time today. However, I will touch on one issue. While the Government has made some progress on it, the issue is a much bigger one than it realises. Political will is required to take it on. I refer to the whole issue of personal debt. There is an issue of government debt, which is being dealt with as it is being reduced on foot of an existing fiscal strategy. The private debt issue in the country, however, is spiralling out of control. The banks are being clogged. In my own county, 250 cases relating to family home repossessions are waiting to go before the Circuit Court in July. That is only one county. Protection for the citizen against the banks must be put in place. Senators Mullen and Craughwell proposed a Private Members' motion. The banks seem to have all of the financial wherewithal and expertise and to be bullying home owners, mortgage holders and people who find themselves in other personal debt difficulties. The State must intervene and protect the citizen. The banks cannot be left all of the expertise and protections. An intervention must happen if we are to have a recovery for everyone. The IMF has written a report claiming that the Irish banks are performing well and are back in profit, but they are back in profit because they are riding roughshod over the people who owe them money and were given loans even though the banks should have known beforehand that they were already going down the swanny. The Government needs to protect citizens. Some 300,000 people are in negative equity and 110,000 people are in mortgage arrears. Those families are up against the wall.

It is not an easy issue to address and it would be easy for politicians on our side to blame the Government. The Government is not necessarily to blame, but it will be if it stands by and does nothing about this.

Michael Mullins (Fine Gael)
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I must cut off the Senator.

Paul Coghlan (Fine Gael)
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I welcome the Minister of State to the House and congratulate him on how clearly he set out the aims and ideals of the plan as embodied in the spring economic statement. They are ambitious but obtainable. It is a good programme as he has outlined it to us.

Apart from being a European requirement, this is a useful exercise in the management of our economy as well as in charting our recovery from the brink of the collapse that the Government inherited. Rescuing the economy and saving the country were of paramount importance. We did not want to default, nor did we want to leave the eurozone. As such, a clear plan to secure the stabilisation of the economy and keep the country pointing in the right direction was essential. There is no doubt that our people have shown great patience and resilience during the crisis. We are indebted to them for all of their hard work and sacrifices. We are glad that the troika is gone from our shores and that the bailout is over, but we must not forget that the recovery still requires nurturing. It is heartening to know that we are the fastest growing economy in the EU.

Repairing the public finances is a work in progress, but Government borrowing has radically reduced and interest rates are thankfully at an all-time low. Too many people are out of work, but it is good to know that unemployment levels have fallen to 10% from a high of more than 15%, with employment levels at their highest since 2009.

The spring economic statement sets out the Government's five-year plan to 2020 for securing and strengthening the recovery. At the heart of this plan is a commitment to protecting our national competitiveness and stability in the public finances. This will ensure an improved climate for job creation, which remains a top priority. More jobs will mean more resources to fund services and reduce taxes on those already at work. The Government's commitment of 100,000 jobs is about to be achieved one year ahead of target. This will lead to more Irish people returning to the country to take up employment than are leaving. By 2018, every job lost by the previous Government will have been replaced, with more sustainable jobs in the pipeline. By 2019, there will be more people working than ever before.

The Government's targets are ambitious and will only be achieved if we continue making the right choices. We are committed to the path that continues reducing the burden of taxation on enterprise and employment, improves our attractiveness for investment and expansion and ignores calls from whatever quarter for a return to the reckless tax and spending policies that destroyed the public finances. The planned targets require a steady growth of between 3% and 3.5% per year, not boom and bust. Steady growth of this nature will eliminate the remaining deficit and bring government debt below average European levels without new taxes or charges. We have moved away from the "when we have it, we spend it" approach to budget management espoused by previous Governments.

Brian Ó Domhnaill (Fianna Fail)
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If Fine Gael ever has it, it will spend it.

Paul Coghlan (Fine Gael)
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Our small business sector needs more support. This, please God, is in the pipeline. Many people have not yet witnessed the benefits of our recovering economy and some families are still struggling to make ends meet. However, if we hold our heads, the situation will continue to improve. The Minister for Finance will have more scope to assist matters further in the upcoming budget.

The addition of an annual spring statement sets out the broad directions needed for growing the economy and repairing the public finances, ensuring a fair sharing out of the benefits of the recovery among those already at work. Private sector employers are once again agreeing sustainable pay increases with their staff and the Minister for Public Expenditure and Reform, Deputy Howlin, has announced the Government's decision to commence discussions with trade unions on the issue of public service pay. All public servants have had their pay cut significantly. Most are also working longer hours. The size of the public service has been reduced by 10% at a time of growing demand for its services. However, all of this was necessary to help us secure stability in the public finances and our national economic recovery. With further improvement occurring, the right time is approaching to open up the prospect of a gradual, sustainable pay recovery for public servants from 2016 onwards linked to continuing reforms in terms of efficiency and effectiveness.

The plan's aim is to offer fair rewards for hard work, not quick profits for speculation. The USC introduced by the previous Government was an emergency penal tax on low and middle-income families. This Government intends to accelerate its phased abolition. Some 330,000 low-income families have been removed from the USC. In the last budget, an additional 80,000 low-income families were removed, the two lower rates were cut and those on the minimum wage were removed from the higher USC rate. It is intended that the upcoming budget will bring to 500,000 the total number of low-income workers who have been removed from the USC net. It is also intended to cut the 7% rate of USC on all those earning up to €70,000 per year. It is also intended to end the unfair tax treatment of the self-employed and small business people.

Strong growth in jobs is funding tax cuts for workers. Less tax on work means more jobs. The plan will reinforce a virtuous circle of increasing living standards, lower taxes, job creation and improving public finances. Our plan will ensure that work pays more than welfare and reduce the number of workers and their families experiencing poverty. Once the low pay commission makes its recommendation in July, the Government intends to respond with a package of measures in the October budget.

There is a renewed optimism in the country. The Government will continue working night and day to secure the recovery. At the next election, the people will have a clear choice between a stable and coherent Government that will secure and strengthen the recovery or instability. Populist promises to reverse every tough decision are nothing but empty rhetoric, irresponsible leadership and bad politics. They are not the solution to our problems. I have every confidence that when the time comes, the people will make the right choice.

Sean Barrett (Independent)
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As always, I welcome the Minister of State to the House. Dr. Stephen Kinsella of the University of Limerick wrote about the spring exercise: "This balancing act deserves applause". What the Ministers, Deputies Noonan and Howlin, are trying to do is commendable, namely, that we not revert to a boom-and-bust cycle. Where I have just come from, the banking inquiry, will have a role to play in that. A new regulation of banks will be required to ensure that credit does not explode as it did to create the property bubble.

I will turn to the exercise that the Minister of State has attempted to set out before us.How many additional resources are coming on stream and how will the balance be achieved between reduced taxation and increased services? This is up for debate under the semester process and I look forward to seeing how public opinion develops in this regard.

The Minister of State outlined extensively the progress that we have made. An interesting analysis by Cormac Lucey indicates that the 2014 deficit was 0.9% of GDP ahead of target. The IMF observed that 0.3% of GDP growth came from EU accounting changes which incorporate the proceeds of crime and international output, 0.6% came from higher than expected tax revenues and 0.4% came from lower than expected interest charges. Any of these could turn against us, which is why the spring economic statement builds in sensitivity tests for current expenditure, while capital proposals will be evaluated later this year.

We tend to loose control over grandiose capital projects. The cost-benefit analysis guidelines which are expected in July will be important in this regard. I proposed amendments to the Roads Bill 2014 to make cost-benefit analyses obligatory. In regard to the track costs of roads, UK studies allocate maintenance costs at approximately 15% of capital costs, based on the number of axles on and torque power of various vehicles. The research suggests that we can get better value from money out of roads. The capacity of a motorway is 55,000 vehicles per day. There is no point in building them on routes with lower traffic volumes. In this new parsimonious era, I am sure that will be kept in mind.

Current expenditure between 2014 and 2020 is projected to remain virtually unchanged. The figures are €49.75 billion in 2014 and €48.375 in 2020. Approximately €1 billion of the adjustment will be made on the expenditure side. On the tax side, the projection increases from €41.2 billion in 2014 to €52.9 billion in 2020. That is where the major adjustment will take place. Perhaps that balance needs further investigation because people are wondering when GDP growth will mean something to them as taxpayers. Of course, they are also annoyed at being forced to bail out the banks. The spring economic statement projections are heavily dependent on increased tax revenue from growth. The projections for growth can be inaccurate. Few people besides Morgan Kelly noticed what was going wrong after 2005. Sometimes it is a good idea to slow down the forecasters and wait until we actually see growth before dividing up the benefits. Projections based on dividing growth between taxes and expenditure can become unstuck if the growth is not as expected.

We are currently educating more people than most other European countries, with about two thirds of school leavers going on to some form of further education. This is a major reason why firms come here. Between the €3,000 paid by students and the €8,000 provided by the Government, Irish third level institutions are achieving world rankings for €11,000 per student. It would cost four to five times that figure in the United States, from where we are attracting enterprises. People are sometimes pessimistic because of what is going wrong but this is one area that is doing well. The quality of our graduates is good and they are not as expensive as in other parts of the world. I am sure that is one of the reasons why the United States is a leading source of foreign direct investment to Ireland.

I will not bore Members with my opinions on tourism. However, continued growth in the tourism sector requires us not to sell Aer Lingus. It has developed nine routes into this country and it carries 4.8 million passengers across the north Atlantic. British Airways has not developed any routes from Scotland, Manchester, with a catchment population of 15 million, or Birmingham, with a catchment of 11 million. Let us allow our iconic brand to generate the returns this country needs in tourism.

I do not know the purpose of post codes given that 98% of post is already delivered by the next day. It appears to be a technological project which will cost us money but I do not know what it is supposed to achieve. It certainly is not doing anything for the postal system. I question the level of return on energy savings when energy prices are falling but I am sure the budget will be adjusted accordingly.

International comparisons are important, particularly given that house prices were far out of line with anywhere else. I recall the regular column in The Irish Timeswhich showed what €100,000 would buy in Dublin compared with everywhere else. One might purchase a castle in Germany or France for the same price as a semi-detached house in Dublin. That has to be our reference point. There is no sense in eroding economic competitiveness by using our hard-won gains to pay higher asset prices. I fear there are signs in the greater Dublin area that these problems may be reappearing. It is no secret that we will need stricter regulation of the financial sector.

Perhaps some of the social programmes deserve better scrutiny. I do not think it is socially progressive to extend medical services to those aged under six years or over 70 years regardless of income if at the same time we neglect those aged between seven years and 69 years who are short on income. Until we resolve these problems, income redistribution should be focused on the needy rather than being universal.

We should also reflect on the mistakes made in the establishment of Irish Water to ensure that we never repeat them. It was supposed to be a conservation exercise but even though we discovered that the public sector was actually the major waster of water we hired all of those engineers into the new company. As Professor John FitzGerald, formerly from the ESRI, has noted, Irish Water has low productivity. We spent €500 million from the pension fund on meters before we decided on an altogether different system of pricing. Senators tabled interesting amendments. It is a pity that the Government did not accept some of them.

The Seanad could also play a role in assisting the Government in preparing development plans. The spring economic statement contains a number of good ideas and this House will assist the Government in its further endeavours in that regard.

John Gilroy (Labour)
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Senator Ó Domhnaill erroneously suggested that 95% of all jobs created were in the Dublin region. The Minister for Jobs, Enterprise and Innovation put the true figure on the record when he addressed the House last week. He also reminded us that if one takes a narrow snapshot of statistics, one can find any result one wishes. However, the standardised techniques through which the CSO and other agencies collate their figures show that 95% of jobs were not created in the Dublin region in the last 12 months.

The Opposition made some half-hearted criticisms of the spring economic statement last week. There was no substance to most of the Opposition contributions, however. The statement is required under our fiscal rules and it is commonplace in other European states to issue similar statements. We are, therefore, standardising our procedures with best practice across Europe. I do not think anyone could be opposed to fiscal responsibility, although I wonder about the previous governments. We have managed to break the alignment of the electoral cycle with the economic cycle.We can see how the previous Government had become masters at aligning both in the past. We can point to the infamous free money known as SSIAs, which were designed to mature in the year before the election and bring with them the undoubted electoral advantage of giving people money for nothing, a consequence of which was the fuelling of an already overheated economy.

Brian Ó Domhnaill (Fianna Fail)
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The Labour Party wanted to spend more.

John Gilroy (Labour)
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The Labour Party was not in government.

Brian Ó Domhnaill (Fianna Fail)
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It was shouting to spend more.

John Gilroy (Labour)
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The people who were in government-----

Brian Ó Domhnaill (Fianna Fail)
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Senator Gilroy wants to go backwards but we should stick to what we are at and look at what the Minister of State is trying to do. We are all here to try to work together. If the Senator wants to play politics, we have -----

John Gilroy (Labour)
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If members of a Government turn around and say that they were not governing and blame the Opposition for the policies that it implemented, I do not think that it is a good Government at all.

Brian Ó Domhnaill (Fianna Fail)
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The Labour Party wanted more spent.

John Gilroy (Labour)
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The Senator's party was in government.

Brian Ó Domhnaill (Fianna Fail)
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The Senator's party was looking for more boom.

John Gilroy (Labour)
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It was Senator Ó Domhnaill's party that made the decisions; it boomed it.

Brian Ó Domhnaill (Fianna Fail)
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The Senator cannot have it both ways.

John Gilroy (Labour)
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It was the former leader of the Senator's party who coined the phrase and called it "boomier". The boom was going to get boomier.

Having spoken for a moment on our previous Government's role in fiscal irresponsibility, we should now talk about fiscal responsibility, which is what the economic statement is about. Jobs are the only show in town if we are to allow people feel the real benefits of the recovery. It is important that real people feel real benefits and that the recovery is not just seen at a macro level. We can point to the macro figures, which are all very good, but we do need to see ordinary, hard working people enjoying the benefits of it.

As a measure of what we have been doing, in 2012 unemployment in this country was at 14.8%. The figure is now down to 10% and it is anticipated that it will decrease to 9% by the end of the year. We will be heading back towards figures of 4% or 5% unemployment, which is considered to be full employment, before 2020. Those figures are real and realistic. It was said several times during the course of this Government by the Opposition that things could not be done. The Minister of State referred to when the Opposition said that not one ounce of change could be negotiated in the troika bailout. We have proven significantly good at that and the Minister of State's figure of €40 billion in future cash flow improvements is evidence of it. That is real money which would have to be found elsewhere otherwise. Not only would we have to find it but the opportunity cost of the loss of that money would be equally damaging to our society.

Just this month we have spoken about 45,000 fewer claimants of social welfare between this year and last year. That is a good figure, although it still is not good enough. When we came into Government, the live register figures were heading well above 450,000. I remember discussions at the time about it heading for 500,000. That would have been an absolute disaster and we probably would not have had the ability to recover from such a vicious cycle. The figure at the end of last month was 349,551. This represents a success, but not a success for our Government but a success for everyone who has got a job and for everyone who has come off social welfare payments. This is where the real success lies.

The fiscal responsibility measures about which we are talking include planning. Senator Ó Domhnaill will agree that planning for the future is almost a new concept as far as his party is concerned. An increasing population requires us to do that in a sustainable way. The spring economic statement puts in place the broad parameters of what that plan might look like. The Senator said that there was no meat or substance in it. Of course, the meat and substance will be added in the budget later on in the year. At the moment, we are starting the process by which people and politicians can engage and outline their own plans and visions for the future.

On the issue of irresponsibility again, Sinn Féin had its recent 212 word policy document on the abolition of Irish Water. There was no reference to the fact that if Sinn Féin abolished Irish Water, €900 million would have to be found for investment on an annual basis in Irish water. That would seriously curtail any Government's ability to reform the taxation superstructure in the country.

We are talking about reducing the universal social charge. The Government has already taken more than 400,000 people from the USC net. A person can earn €32,000 a year and then rapidly move into paying 51% of his or her entire income back to the State after that point. The entry level to the highest rate of tax is way too low and needs to be examined in light of the extra resources the Government has. The Minister for Public Expenditure and Reform, Deputy Howlin, referred to these extra resources as an economic dividend to the people of Ireland for the undoubted sacrifice they have made. Reducing a deficit from €15 billion a year to €4.8 billion this year and smaller again next year is a remarkable feat. Again, this is not a pat on the back for the Government but a recognition of the sacrifice of the Irish people. The deficit was reduced by way of a combination of revenue raising measures and decreasing expenditure.

Undoubtedly, during that time, people have suffered and struggled. We have seen it. We are not immune to looking at the difficulty people have found themselves in. That is why this year, at last, after eight austerity budgets, we might be able to put a few pound back in people's pockets. At the end of the day, that is really what the entire measure of an economy and a successful society should be. The way to do that is to plan. The spring economic statement outlines the broad parameters of that plan. We look forward to engaging in robust debate with politicians, from all parties and none, and to seeing the budget and how the Government will put flesh on the bones of this plan.

Kathryn Reilly (Sinn Fein)
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I welcome the Minister of State to the House. I am not sure if he is aware that I used him as an example a number of weeks ago during the debate on the presidential candidate age referendum. I think many people considered him a bit of a political broadcaster himself, but I think he is a good example for why we should reduce the age limit for candidates.

Simon Harris (Wicklow, Fine Gael)
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I thank the Senator and will not take it the wrong way.

Mark Daly (Fianna Fail)
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He is going for Taoiseach; it is okay.

Paul Coghlan (Fine Gael)
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He is on his way up anyway.

Kathryn Reilly (Sinn Fein)
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I am sure Enda is shaking in his boots. Having started on a good note, I am also glad that we had the opportunity to address the House today on the economic statement, although my contribution may not be as positive as that of some Senators here this evening. I am sure the Minister of State will have expected that.

As highlighted by my colleagues in the other House, the economic statement is being used to ask people to forgive and forget. It is asking people to forget about the cuts they have faced in child benefit, carer's allowance and lone parent payments. There have been reductions in the salaries of young teachers, nurses and gardaí. There have been cuts to rural services. They are being asked to forget the imposition of the austerity measures over the past number of years. It is asking the people to forgive the Government for cutting young people's welfare payments and to forget that this in itself partly contributed to a surge in emigration among young people.

It is asking people to forget that more than 20% of jobs are now low paid and that many workers are poorer now than they were before. It is asking us to forget that 450,000 people are on waiting lists as a result of the accident and emergency crisis and to forgive the failing to make any real inroads into reducing waiting lists and waiting times. Despite promises to end the scandal of patients on trolleys, there is no sign of this problem being resolved. We are asked to forget that too. We are being asked to forget that we nationalised our banks and to forgive these banks, which we saved, when they do not pass on lower interest rates to mortgage holders.

The Government has failed to meet some of the claims it made for itself on coming into office. In the stability programme update issued in April 2011, it said that the economy would grow by 8.7% from 2012 to 2014.It was, however, little more than half of that figure, at 4.7%, because some policies had had the effect of slowing the economy. That is the truth behind the talk of recovery. The recovery, in large part, has come from the overseas sector, exports and net financial flows from overseas. It is widely accepted that some of this involves an element of financial chicanery and accounting practices that might be designed to avail of low taxation rates here, but little of it has to do with the real economy.

Last week the Minister for Finance made the bold claim in his contribution in the Dáil on the spring economic statement that our young emigrants would come back. However, the facts tell a different story. The number of new graduates emigrating is actually higher than at any time in the previous six years. Only several weeks ago over 7,000 young Irish citizens aged between 18 and 35 years snapped up Canadian work visas in only a couple of minutes. It is also worth noting that in recent studies emigrants identified four key barriers to their return. They are poor infrastructure, precarious working conditions and low pay - it is not just the availability of jobs but the types of job available - a lack of career opportunities and progression and the lack of affordable housing. There was nothing in the spring economic statement that addressed these barriers in a meaningful way to allow these emigrants to come back to live, raise families and pursue careers here.

There are 61,000 fewer people aged between 20 and 34 years in employment since 2011. The number in employment fell by 14,000 in 2014 alone. The level of employment in the west fell by 4,800 in the year to December 2014 and by 5,000 in the south west. This is a similar story in the Border region where the number in employment has fallen by 1,300. The reality is that there is a two-tier recovery. While we can talk about positive economic figures, the recovery is not giving an advantage to all people. Many are being left behind, which is manifesting itself in discontent and people's reactions and protests to, say, water charges. We cannot have a two-tier recovery because it will only be broken and not for everyone.

Colm Burke (Fine Gael)
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I welcome the Minister of State who has made a comprehensive statement on this matter. I remind Senator Kathryn Reilly that 20,000 jobs will be lost in Northern Ireland, the equivalent to 60,000 jobs being lost in the Twenty-six Counties, and that it has had poor economic growth rates for several years. This is an issue that should not be ignored.

In 2014 we had a 4.8% economic growth rate. In 2015 it is predicted that the rate will be 4% which will continue into the immediate future. We have 95,000 jobs that were not available in 2012. The level of unemployment has come down from 15% to 10%, with a prediction that it will be down to 9.2% in the not too distant future. Long-term projections indicate that between 2015 and 2020 an extra 200,000 jobs will be created. It is important that we work towards achieving this target. We all have a part to play in this regard.

The Minister of State referred to the changing demographic profile of the country. There are 585,000 people aged over 65 years. Within the next 16 years this figure will rise to 990,000. To support the current level of pension provision, we need 3.5 people working for every person in receipt of a pension. By 2030, if the same ratio were to apply, we would need 2.7 million people working to maintain that level of pension provision, health care and nursing home provision. It is important that we set targets and do everything possible to achieve them in a careful and proper manner.

The number unemployed has been reduced and now stands at 343,561. It is still a high figure and we have much work to do. In the past 12 months the number dropped by over 45,000, but it is not an easy issue to tackle. It is about upskilling people who were employed in jobs that are no longer available. It is important that we play our part in this regard.

I am not at all convinced that we are giving enough support to the self-employed and those small and medium-sized enterprises providing two to 20 jobs. There are many obstacles in their way. At a meeting earlier today an issue highlighted to me concerned the self-employed who did not have a company. Take for example a person in such circumstances who earns €60,000 a year. If he or she buys equipment to make sure he or she can keep up to date with the services he or she provides at a cost of €30,000, he or she can write off this amount in tax over seven years. However, he or she is still taxed as if he or she earns €60,000. That is an unfair system. The nature of some businesses does not allow people to form companies, meaning they have to operate as self-employed persons. We need to take this into account. They have the incentive to invest, as well as the incentive to provide a service. Accordingly, we need to encourage them to provide that service.

I am concerned about the issue of housing, an issue on which the Minister of State will agree. The building of housing is crucial to get more people back into work. The Government has provided much funding for local authorities to provide social housing in the next three years. It is important that clear targets are set as to what has to be done in that three year period. It should not be a case of building 100 houses by the end of the three years. There must be targets to be met in six months, 12 months, 18 months and two years time. For example, I have an issue in Cork, the Cork city north-west regeneration project. Last year the Government allocated €10 million for this programme, but it is my understanding only €4 million was spent. In the past three years only 23 houses have been built under this regeneration programme which was first talked about when I was a member of Cork City Council in 2007. Very little progress has been made since. Clear targets must be set in the spending of such moneys by local authorities. If they do not deliver, we will have to take alternative action to ensure the targets are met. It is grand to allocate moneys for such projects, but in the past we have allowed them to go beyond the set time. Now, more than ever, we need targets in order that we can get more people back to work at a faster pace.

An issue that needs to be examined is the number of people who have moved abroad and what we can do to bring them back. For someone who has come back and is trying to get into the social welfare system while they are trying to find employment, the system can be far too bureaucratic. It can take up to 15 weeks during which time they become discouraged and leave again. I have seen this happen and the issue needs to be examined urgently.We need people with skills, particularly in the building trade, to come back to this country and we need to ensure there are proper support mechanisms for them, their families and their children.

I thank the Minister for his contribution and I thank him and his colleagues for the work that has been done to set the targets to be reached over the next few years.

Mark Daly (Fianna Fail)
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I welcome the Minister and I hope he does not have to run for President because I am sure he will be Taoiseach. Maybe he will run for President after he has been Taoiseach.

Last week a survey of 27 countries ranked people's trust in Government, business, NGOs and the media. Ireland ranked the worst, with only one in five having trust in those former pillars of society. We all know the various reasons for that, the crisis in charities in the case of NGOs and the banking sector in the case of business. In Ireland, people's level of trust in the elites was the lowest of all the 27 countries surveyed. Those countries included China, which says a lot about Irish people's confidence in politics.

The reason for this is the lack of equity in our system. I do not know if the Minister read it but there was an interesting piece in the Irish Independentat the weekend which stated that some 260 people controlled €76 billion in assets and that the bottom half of the population have €56 billion among them all. That is a level of inequity that is staggering and it is not going to get any better as the wealthy have got wealthier in this crisis. I recall the infamous words of former US President George W. Bush when, addressing a crowd at a fundraising event, he welcomed the haves and the have-mores. Some of these people caused the crisis and now people view them as having profited from it.

Some of the issues brought up by my colleagues opposite show why there is a lack of confidence in the political system, such as the charge against this and previous governments that they are borrowing money to buy votes. When we cannot balance the books, the idea of giving ourselves a pay increase as politicians is hardly likely to improve our poll ratings. The confidence of the Irish people and people in the 27 countries that were polled will not be restored when they understand that the proposal for public sector pay increases involves politicians also getting a pay increase, and borrowing money to do so. That is, unfortunately, one of the proposals.

Paul Coghlan (Fine Gael)
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That is not the case.

Mark Daly (Fianna Fail)
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Is Senator Coghlan against the pay increase?

Paul Coghlan (Fine Gael)
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I am for keeping things in line and the Government is making a fair job of that.

Mark Daly (Fianna Fail)
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He is in favour of the pay increase.

Diarmuid Wilson (Fianna Fail)
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Senator Daly without interruption. Senator Coghlan, as a senior Member of this House, should know that he should not interrupt other Senators.

Mark Daly (Fianna Fail)
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I agree with the idea mentioned by Senator Burke of the self-employed having some social protection. We all know cases of people who invested in their business, worked hard and employed other people but when the crisis came they had no safety net. There does need to be a provision for that.

Paul Coghlan (Fine Gael)
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I agree with that.

Mark Daly (Fianna Fail)
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Thank you. Unfortunately, the Department and the Minister for Social Protection stated that the advisory group was not convinced that there was a need for an extension of social insurance for the self-employed to provide cover for jobseekers. The Senator might take that up with his Minister and, if we were to put down a motion, I hope he would support it.

There should be equity for all. There should be a living wage but how we get to the concept of a living wage is a difficult matter because a minimum wage is not the same as a living wage. When one is better off on social welfare than working there is a problem. When families are better off not accepting jobs and remaining on social welfare the system is not working. Equity is what we are looking for. A levy on banks was suggested because they would not bring down their variable rates and we could do that. We could also bring in legislation. There are a number of other things the Government could do but it must do something because the banks are causing another crisis in our housing sector by putting people under so much pressure. They are vetoing the mortgage resolutions and forcing the taxpayer to pick up the bill because when people lose the roof over their heads they require housing at the expense of the taxpayer.

The spring economic statement is part of the new requirements under the fiscal treaty but another new Commission proposal is of great concern and would affect us all. It is one of those creeping, incremental proposals that they keep talking about in Europe until people get so used to hearing it being mentioned that they think it will never happen. Then, one bright breezy day, it does happen. There are ongoing manoeuvres to ensure corporation tax is paid in the countries in which earnings are generated. This is the Commission's agenda and its aim is to achieve that agenda. As the Minister will be aware, Ireland lost a vote on this being an issue of subsidiarity, having argued that it was for Ireland alone to make the decision. Ireland alone sets its corporation tax rate but the issue is of concern for us because big countries such as France, Germany and Italy would like corporation tax paid where a product is purchased. This might be very hard to prove in the case of Google, which makes many sales through its search engine in Ireland but to Italian customers, as a result of which Italy is demanding its share and Ireland is losing the battle. Our corporation tax rate of 12.5% counts for nothing - what matters is the fact that these companies pay their tax here based on the fact that we are in the European Union. If the proposal for corporation tax to be paid in the country where revenue is generated is successful and Ireland loses the case there will be no money to pay for the things we were talking about. I ask the Minister to continue the fight to prevent companies which are based here because of our corporation tax rate from moving as a result of the big boys in Europe getting their way once again.

Diarmuid Wilson (Fianna Fail)
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Before I call on the next speaker, I welcome councillor Padraig Fleming and his guests from County Laois, who are in the Visitors Gallery.

Terry Brennan (Fine Gael)
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Go raibh maith agat a Leas-Chathaoirligh agus cuirim fáilte roimh an Aire Stáit go dtí an Seanad. The Government's spring economic statement shows a real vision to spread the recovery to all corners of this country. There is no doubt that the economic recovery is gaining momentum and this Government has a plan to spread its benefits to everyone throughout the land. After years of hardship caused by the economic crisis and the disastrous policies of the last Government, it is time for better living standards and improved public services for all the people of the land. It is time to give our young emigrants the opportunity to come home. The Government has a plan to achieve this vision and the spring economic statement shows that the plan is already working.

I will give the Minister an example of my own in the form of a meeting I had with two young professional people.I have to say that one of them is from my own parish. I did not know her and never saw her in my life before, but I met her in New York City. Her husband is from Galway. Both of them are living and working in the tax exile of Bermuda. Both are highly qualified professional people working for one of the biggest companies in the world. Having gained great experience, they are coming home to this country to rear a family. They realise the opportunities that are in this country now. They are not coming home to apply for social welfare. This is a true statement and I am sure there are other people doing the same.

The national deficit has been significantly reduced from €15 billion to €4.5 billion. These are true facts and figures that cannot be denied. Our national debt is now moving closer to the European average. We are being commended on our efforts not only in Europe but also in the United States. I have heard and witnessed such commendations myself. I did not read them, I heard them.

This was achieved, thankfully, albeit with major sacrifices by people from all walks of life. It was also achieved with fewer tax increases and more expenditure cuts than anyone thought possible. We ensured that core social welfare rates were maintained to protect the most vulnerable. While getting the economy back on track, we built more schools in the midst of the economic recovery than were built in the previous Government's term during what were called the boom years. These facts and figures speak for themselves.

In what is the first step towards universal free GP care, 300,000 children and senior citizens who must currently pay to see their GP, will no longer have to do so from this summer. We do not often advertise or claim these achievements but we must recognise them. We will achieve the promised 100,000 jobs this year, which is a year earlier than planned. By 2018, the jobs lost during the crash will have been recovered.

Ireland has established its reputation as the Internet capital of Europe and continues as such, but do we realise that? This week, our reputation was enhanced with the decision of the online fashion company Zalando to open a research and development centre in the Dublin docklands. This German company will create 200 jobs over the next couple of years, although it faced opposition from its own country.

Ireland continues to attract global companies to its shores and the Government will continue its work in this regard for many years to come. We are now focused on improving the lot of the so-called squeezed middle - the people who feel they have been paying for everything since the economic crash. Many of these people now find themselves struggling with mortgage arrears, but the Government will make an announcement on this in the coming weeks.

The Minister for Finance plans to meet with the six main lenders in Irish banking this month to discuss their plans for reducing interest rates. The main priority of this Government's plan is to grow the economy and improve living standards. It is putting more money back into people's pockets through further reductions in income tax and the universal service charge. This is being done in a sensible, responsible way and will not jeopardise our recovery.

In his spring economic statement to the Lower House, the Minister, Deputy Noonan, said we would not return to the "If I have it, I'll spend it" ways of the previous government. That approach, which was aimed at buying elections, would represent the single biggest threat to our economic growth.

Gerard Craughwell (Independent)
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Cuirim fáilte roimh an Aire Stáit. When I was elected, I said I would give credit where it was due and would not oppose for the sake of opposition. Some 95,000 jobs is quite an achievement, as is economic growth at 4% plus and declining unemployment. I do not want to rain on the Minister of State's parade but, as Senator Barrett said some time ago, let us have cash in the till before we start spending it.

As regards predictions of future growth, I remember a time when they were predicting a soft landing, but the crash that occurred was crazy. I do not care which side of the House the prediction came from, it was clearly generated by the same people who are generating predictions today. We can only go on what we are being told, but let us be careful about how we move forward.

Senator Brennan referred to the preservation of social welfare payments, but many people on social welfare may not necessarily agree with his analysis. We really did make the poor poorer as we worked towards recovery. However, it is a great credit to this Government that we have attracted some of the largest global names for jobs into this country. Our IT sector is powering ahead, but if the Minister of State wants that to continue he had better stop squeezing the third-level sector. He had better start providing lecturers, reducing class sizes and funding further education properly.

Earlier today, I attended the Joint Committee on Education and Social Protection which was attended by representatives of the Irish National Teachers' Organisation and the national schools. In the 21st century, we are talking about computers being moved on trolleys between classrooms, which does not bode well for the future.

We must start considering where we will spend our money. Senator Daly spoke about public service pay and was afraid that we in the Oireachtas might get a few bob. I am afraid that anybody might get a few bob before we start fixing the services.

Paul Coghlan (Fine Gael)
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He obviously has no concern for councillors.

Gerard Craughwell (Independent)
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I will take an extra minute for every time the Senator speaks.

Diarmuid Wilson (Fianna Fail)
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You will not. The Senator should stick to the time.

Gerard Craughwell (Independent)
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Let us start putting the money into services and restore them to a 21st century level. When the Minister of State comes to deal with employment issues, he has to do away with zero-hour contracts at the lower end of the employment scale. He must see to it that employers will engage in collective bargaining. We cannot continue to have situations like what is going on between Mandate and Dunnes Stores.A significant number of our population live in income poverty, which is the worst type of poverty in that one works for one's salary but one does not have enough to live on.

I want to see the restoration of pubic service pay. I hear people talking about productivity and I engaged in negotiating the Haddington Road agreement for two years when I was president of the Teachers Union of Ireland, and we did deals that were to die in 2016 and they will have to happen in 2016 unless the Government wants to start a war with the public service. There will be no further productivity at this point in time. We are looking for the restoration of what was taken from public servants. Before I came into this House I suffered the pain of the cuts that were imposed on the education sector. I have suffered worse pains since I was elected to the House, but that is another day's work.

Paul Coghlan (Fine Gael)
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The Senator can tell us about that afterwards.

Diarmuid Wilson (Fianna Fail)
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Senator Craughwell, without interruption.

Gerard Craughwell (Independent)
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I am concerned about us embarking on what will be the next bubble that will bring Ireland to its knees. I am delighted that milk quotas have been abolished. I am a city boy and, for me, milk comes in a bottle or a carton. I know very little about the production process. However, I know that when an industry starts to expand as a result of the lifting of regulations, such expansion needs to be carefully managed. If it not, we will finish up with massive herds of up to 1,000 cows and someone somewhere in the world will sneeze and decide that this was caused by increased milk production and suddenly we will see the milk bubble that we are creating collapse. I am deeply concerned about that.

I agree with Senator Barrett on the sale of Aer Lingus. Its sale has been an issue in this House for several months now. Aer Lingus simply cannot be sold. It is a part of everything that is Irish.

I also agree with Senator Barrett with regard to Irish Water, and what a mess we made of that. It is still a mess and that mess will roll on for God knows how long more. The Government is now going to take the cost of the water charges out of our pay packets. I wish it well with that because the moment one utility can take money out my or anyone else's pocket, the ESB, Eircom and the other utilities will say that if the Government can do that for Irish Water, it can do it for them. I will fight tooth and nail to stop the Government doing that if it tries to move in that direction.

It is crazy that we are offering free medical cards to the under sixes. As I move rapidly into my mid-60s, I have found that my health has not been the best for the past ten or 15 years. I hope the stent I have in does not cave in and I need another one because I do not have a medical card and health insurance is becoming too expensive.

Paul Coghlan (Fine Gael)
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Go easy on it.

Simon Harris (Wicklow, Fine Gael)
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Do not put it under too much pressure.

Gerard Craughwell (Independent)
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As Senator Barrett said, as we move forward in medicine we need to concern ourselves with giving medical cards to the needy, not the greedy. There are people who can well afford to send their children who are under six to the doctor. Let us not proceed with this measure. There are other people who simply cannot afford it.

On the issue of upskilling, I have already adverted to the overcrowding that is taking place in our third level and further education sector and in our second level schools as a result of changes to the pupil-teacher ratio. There is also a problem with respect to upskilling in that those with a level 6 or level 7 qualification under the national framework of qualifications who want to move in a new direction have to start at level 5, and there is an impediment in that context.

As for the banks and the bankers, what can I say? The bankers are sitting on their big fat bonuses, big jobs and high salaries while the people who bailed them out are struggling to survive. We had a debate on receiverships earlier and once again I was astounded by what I saw in the House. All those on the opposite side of the House to me spoke in favour of taking steps to regulate receivers and then they voted against the motion. Politics is a crazy game.

Repossessions, receiverships, the bonus culture and all that must be taken care of. I would love to go through with the Minister of State my five-point plan to assist those in mortgage arrears, which he has received and I know he has read it, because he is one of the good ones. Senator Coghlan is right in saying there is a trajectory for him and it is upward only. I hope the Minister of State takes on board those five points. They are simple but they would ease the pain of many of our citizens. I thank him for coming into the House this evening and giving of his time. The Acting Chairman has been most understanding.

Diarmuid Wilson (Fianna Fail)
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Thank you, Senator. I am a very understanding person, as the next speaker, Senator Keane will attest, and she will have six minutes.

Caít Keane (Fine Gael)
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I was supposed to be the second speaker, so something will have to be done-----

Diarmuid Wilson (Fianna Fail)
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I have the list in front of me.

Caít Keane (Fine Gael)
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-----about getting regulation of the order in this respect to the Chair.

Diarmuid Wilson (Fianna Fail)
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That is a matter for-----

Caít Keane (Fine Gael)
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I was downstairs at a meeting with members of the chamber of commerce in Dublin to discuss the spring statement, which is about involving people in-----

Diarmuid Wilson (Fianna Fail)
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It will be winter if the Senator does not get on with it.

Caít Keane (Fine Gael)
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This is very important and I do not care if I miss making my statement because those who make the jobs and keep the country going are the small businesses of this country. I left a room downstairs full of members of the chamber of commerce in Dublin. I will have to speak to our Whip about this. I will send the note indicating I was second speaker to the Chair in the morning. We will get the order of speakers right. It is not the Acting Chairman's fault as obviously he did not get the list.

Gerard Craughwell (Independent)
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Three minutes have elapsed now.

Caít Keane (Fine Gael)
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I do not care how many minutes have elapsed. The chamber of commerce is important and I am not sorry for mentioning it three times. Its members are the people who make the jobs; we make the regulations. Sometime we have put a fix in the gap, but thankfully the Minister, Deputy Bruton, and the Minister of State, Deputy Harris, have set out 80 to 90 specific details for small businesses, for which those businesses are thankful. I was downstairs listening to those in small businesses thanking the Government.

The purpose of the spring statement was to get away from what was always criticised, namely, short-term planning, buying votes and all the old ways of doing things. It set out the current economic fiscal situation and we are in a much better position now than we thought we would be in four years ago. Who would have thought that we would have €1.5 billion extra in funds and that we would look to give something back to small businesses? We will look to give something back to the people who saved this country, who worked with us to ensure we got out of the very difficult circumstances we found ourselves in. They helped us and many reforms were introduced.

A positive development is this new departure to provide a level of forecasting in advance. There was great criticism of the process in the past when everyone in Brussels knew what the forecast was going to be before the Deputies in Dáil Éireann and the Senators in this House knew what it would be. Now we can have collaborative, participative democracy budgeting. That is what this is about. It is a good development. We know how much we have but we must be prudent and act wisely and responsibly to ensure the country stays the way it is and on the right trajectory. If the economic crash has taught us anything, it is that we must be responsible.

I was in the Dáil for the announcement of spring economic statement and the Minister, Deputy Howlin, said that no one owes us anything, no one owes us a living. We have to make sure we do things right ourselves as well. We have to ensure others such as the banks do things right as well. Previous speakers have spoken about that.

We received emergency funding at the time when the markets stopped lending to us but we owe it to ourselves to ensure we do not allow a return to that. That is why we have sought to broaden the tax base to prevent over-dependency on property and transaction taxes which contributed to the crisis. We have an extra €1.2 billion to €1.5 billion in funds and both Ministers have spoken in the House previously about the 50:50 split between tax cuts and spending increases, which will be announced later. Some people have criticised the statement and said that the Ministers did not tell us anything new. The statement was not the budget, rather it was a trajectory on forecasts and on fiscal prudent management. France, the United Kingdom and many other countries in Europe have this system. We have not done it to date. This year was the first time for us to do it and it is a new departure.

The measures in respect of the 50:50 split between tax cuts and spending increases will be announced in the budget but they must be affordable. That is why the EU as a whole has adopted rules to support stability. That was adopted by the Irish people to ensure we do not lose the run of ourselves. Stability matters as the people voted for it. The Government outlined in the spring statement that it will see increases of €600 million to €700 million which will allow investment.

I want to concentrate on one issue whereas previous speakers have mentioned other issues. I would concentrate on the mortgage issue if time permitted as it is very important. Child care provision is an issue that cuts across every Department and every Minister. Each of them must give a bit to ensure that the Department of the Minister for Children and Youth Affairs, Deputy James Reilly, is the one that is really looked after in the next budget because it affects every job, person, parent and child. It affects not only the child where the parents go out work but the child who is cared for at home.Child care involves more than just caring for children; it involves education. The pedagogy of education is so important to children between zero and three years of age. Families, particularly those in deprived areas, need child care and health education. This is the business of every person in society. This is a society as well as an economy and we must ensure we get it right. We must ensure society is functioning and fair. The people, including children, depend on us. The children of today will be the fathers and mothers of tomorrow. For every euro spent on child care, €10 is actually returned to the Government in savings in respect of juvenile justice and prisons. That is not my statistic but that of Professor Weikartfrom the United States in a study carried out 20 years ago. We are behind the curve in research in Ireland, but it is now occurring.

Tackling homelessness is a very high priority. I compliment the Government on the priority action it took and its announcement yesterday on social housing. We added over 1,000 nurses in 2014. Good news makes news for a day, but bad news is bad news forever. Three hundred new gardaí were recruited last year and there are to be 250 more this year. Recruitment was stalled, but it has started again. There are to be 920 additional teachers, 400 resource teachers and 365 special needs teachers.

Some pensioners had their pensions nearly halved and some lost on investments. The pensioners who made the State are suffering. In addition to considering children, one must consider older people. They made the country that we have. As we piggybacked on them for so long, we must ensure they are protected. The number of people over the age of 65 is projected to increase from 11% of the total population in 2010 to 15% in 2020 and 24% in 2060. That is a huge demographic change and we have to provide for it. It will cost €200 million.

Social care, including child care, care of the elderly and all of the bits in the middle, must be considered.

Diarmuid Wilson (Fianna Fail)
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I thank the Senator.

Caít Keane (Fine Gael)
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I will sit down as I know the Acting Chairman is shouting at me.

Diarmuid Wilson (Fianna Fail)
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No, I did not shout at the Senator. I would not do so.

Caít Keane (Fine Gael)
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We must work with the people who are keeping the country on the road. The representatives of the chambers of commerce are waiting at a meeting downstairs. I hope we will get back to them.

Diarmuid Wilson (Fianna Fail)
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To clarify, I would never shout at the Senator. She will appreciate that I follow the list in front of me. If some other list went astray, it had nothing to do with me. Perhaps the Senator might take up the issue at the next group meeting with the Whip.

Paul Coghlan (Fine Gael)
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I can clarify the matter. I do not know what happened in my office. Senator Cáit Keane was second on the list, but I accept the Acting Chairman's word. He is blameless. I know from having checked that the relevant list is not on his desk.

Caít Keane (Fine Gael)
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I thank the Senator. As always, he is a well of information.

Gerard Craughwell (Independent)
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My God, there is such a backslapping exercise being engaged in.

Michael Mullins (Fine Gael)
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I welcome the Minister of State, Deputy Simon Harris, and very much welcome the opportunity to discuss the spring statement. As Senator Sean D. Barrett said, there has been a very positive reaction to it from very eminent commentators. I regard the document as a revised and updated roadmap to guide the country safely along the bumpy road to economic recovery in a way that will enhance the lives of all citizens. We all know where we came from and how we got to our current stage of progress. In 2011 the Government was given a mandate by the people to repair the economy and the public finances, to create jobs and give some hope and confidence to the people. The country was in freefall; our sovereignty was compromised and our international reputation was in tatters. Difficult and painful decisions were taken and huge sacrifices made by the people to get the public finances under control. The Government worked hard to repair our reputation abroad and gradually confidence grew in our ability to manage our own affairs. This led many significant international companies to decide to invest here, resulting in the creation of many badly needed jobs.

Government policies in the past four years have worked well and the economic recovery is taking a firm hold. Some 95,000 jobs have been created since 2012 and there has been a reduction in the number unemployed for nine successive quarters since 2012. The economy is growing at the fastest rate in Europe, with a growth rate of 4% projected in 2015, having reached 4.8% in 2014. All jobs lost during the recession will be replaced by 2018. By 2020, 200,000 jobs will have been added to the 2015 figure. Fewer people are emigrating and some people are beginning to return as circumstances improve. We need them back. We are beginning to develop skills shortages, particularly in the trades. I hope there will be a significant increase in the construction sector. We will need some tradespersons to return to the country and we are beginning to see this happen.

The public finances are under control, with the deficit falling below 3% this year. Our debt levels will reflect European levels in the next few years, as the Minister of State said. We must ensure the mistakes of the past will never be repeated. It is the responsibility of the Government to build on the recovery in a prudent, focused manner. Economic recovery provides the platform on which increased job creation, increased economic growth, better services and living conditions can be delivered. Additional resources that become available must be targeted at those who suffered most during the downturn.

It is welcome that the projected €1.5 billion in leverage that the Minister for Finance will have in the next budget will be split 50:50. Some 50% will be used to deliver tax and universal social charge, USC, reductions for low and middle income earners, while the remainder will be targeted at the reversal of cuts to public services. Some 330,000 people have been taken out of the USC category by the Government since it took office. It is envisaged that 90,000 more will be taken out of this category in the next budget. The USC rate will be cut to 7% for those earning less than €70,000. This will be the next step towards the eventual dismantlement of the hated charge which was an emergency measure introduced by the previous Government. It was critical at the time, but we all aspire to having it dismantled in as short a time as possible.

It is critical that we ensure it pays to work. Employment is the surest way of lifting families and individuals out of poverty. Not alone does it take individuals and families out of poverty; it also improves their self-esteem and physical and mental health.

When the Government is reversing cuts to public services, I want to see children and adults with disabilities at the top of the priority list. It is shameful that the most vulnerable must fight for recognition and resources. Although there are many good causes, the disabled, including children, must be targeted for special consideration as resources become available. Special attention must also be paid to respite care services.

The Minister for Finance, Deputy Michael Noonan; the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, and the other members of the Government have done an amazing job in stabilising the public finances and getting the ship of State back on an even keel. However, there is still much to be done. Job creation is to remain at top of the agenda. The recovery is slowly moving to the regions. I certainly hope the regional strategy being developed by IDA Ireland and Enterprise Ireland will have a huge impact. However, small businesses are struggling and we need to support them as resources become available. The provision of high speed broadband in rural areas is a key concern.

Rates which have been referred to by previous speakers must be addressed, with business costs, bank charges and the availability of finance.These are issues that impact on every small business. I note the issue of the self-employed. We saw many of these people who took a risk during the boom time, including small developers, builders and subcontractors. Later, when they found themselves out of work, their employees could receive benefits from the State but those who had provided the jobs could not. The issue of PRSI for the self-employed must be addressed as a matter of urgency and the self-employed brought onto a par with employees. Previous speakers have spoken of the need for further investment in education to reflect increasing numbers, but an effort must also be made to reduce the pupil-teacher ratio in some of our schools. Health needs further investment. No doubt, that will happen as resources become available.

I hope the spring statement is updated and refined regularly. We need more openness and debate on budgetary matters. The people are entitled to know regularly how the Government is progressing and its plans and priorities. As public representatives, Deputies and Senators must have an opportunity to influence how the people's money is spent. That is critical. Our future will be secured by prudent management, greater efficiency in our public services and shrewd capital infrastructural investment. To date, the Government has made much progress. Within a year, the people will have an opportunity to adjudicate on how well it has done. I have little doubt that the result will be positive and the Government will be given a further opportunity to build on the progress that has been made and to ensure we have full employment by 2018.

Simon Harris (Wicklow, Fine Gael)
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I thank Senators on all sides for an interesting debate. If I have picked up one thing from it, it is that no one on any side of the Houses and no citizen is suggesting that the job of work is done. In fact, there is a great deal more to do. I often describe my four years to date in the Oireachtas by saying that in my first three and a half years, the pause button was pressed on so many of the important issues which Senators have raised as we fought to restore and win back our economic sovereignty. Now that we have won back the sovereignty, we can begin to have the exciting and important conversation all our citizens want us to have on how best to cut taxes and increase public expenditure and on what areas to focus expenditure. From the contributions of all Senators, it is clear that there is much to discuss and much to do and that a great debate needs to happen. I am sure it will happen in this Chamber and, as such, I look forward to feeding into it in terms of where those priority areas should be.

If there is one specific benefit of the spring economic statement, it is that we can now have an honest debate. Last time I checked, almost all parties in both Houses had signed up to the European spending rules. They have signed up to the fact that we must live within our means and within certain economic parameters. If that is still the position of all parties and groupings, including Independents in this House, the fiscal space is in and around €1.2 billion to €1.5 billion for the next budget. Roughly speaking, it is likely to be the same later although I accept what was said about forecasts. Therefore, we can now discuss how best to spend that. That will lead to much better and more informed debates for us all and I look forward to that.

I will run quickly through some of the issues that were raised during the debate. Senator Ó Domhnaill raised the issue of the self-employed and I agree that it is an issue that must be addressed. I am pleased the Taoiseach took the opportunity of the spring economic statement to say the issue of the self-employed and how they are treated by the tax system will begin to be rectified in the next budget. I agree absolutely that entrepreneurial spirit needs to be encouraged. That is why we have established the local enterprise offices and the Action Plan for Jobs and are putting in place measures. There is always more to do.

In respect of part-time workers, I note that there will always be people in the economy who need to work part-time for family reasons and who want to work part-time in other cases. We will continue to support them. Thankfully, however, we are seeing ever more people who were in part-time work moving to full-time work as the availability of working hours increases in the economy.

On the issue of regional economic growth, which a number of Senators raised, we are putting in place regional strategies and plans. A €250 million fund is being put towards that to ensure real economic growth is felt in every part of the country. We will stop the cycle of emigration Senator Ó Domhnaill and many others spoke about. The spring economic statement shows that from 2017 onwards, our emigrants are going to begin to come home. It is time to invite our young and not so young Irish people to come back home.

Senator Paul Coghlan made the point about the universal social charge and the ability to accelerate changes. I was pleased he mentioned that by the time of the next budget, 500,000 citizens who were paying the charge when we came to office no longer pay it. In particular, the Government wants to see a focus on those who are paying the 7% rate, which is penal. It is too high and being paid at too early a point. If we are serious about the squeezed middle, that is where we need to focus in relation to tax reductions. Tax reductions, as the spring economic statement shows, can lead to job creation. They are not irresponsible if they are done in the correct manner and targeted at the right people. As stated in the spring economic statement, the ESRI report outlines that if we follow a path of tax reductions on work, we can create 20,000 more jobs over the lifetime of the plan.

Senator Barrett raised the issue of the capital plan. I note that capital infrastructure is something in respect of which the Senator has an expertise. We will have the Government's capital plan in June. I take the Senator's point about the need to ensure we learn the lessons of the past. In my time on the Committee of Public Accounts, we dealt with many scary projects that happened in the past. We need cost-benefit analyses and to ensure our projects finish on time. While I am not saying everything is perfect, I am pleased we now have an Irish Government Economic and Evaluation Service. It is a very important job. It is the job of the service to check that we are getting value for money. It does not just look at the surface level, but evaluates further the benefit of a particular spend. In my own area, we have the Office of Government Procurement which centralises procurement and puts better standards in place. We also have the multi-annual expenditure ceilings so that one does not have Departments rushing to the end of the year with the feeling that they must spend money. The budget can be applied to the next two years, which is important. I agree on the reduction of the tax burden and was pleased to hear Senator Barrett refer to it. I understand why we put an emphasis on the low-paid and the vulnerable in all our political discourse, and rightly so, but there are many people out there who are just struggling. Many people are working really hard who do not get the attention they deserve. That is why I would like to see cuts to the USC and a focus on reducing the burden of tax.

Senator Gilroy outlined very eloquently the importance of the spring economic statement and I would like to reiterate that. The statement does four things. It updates our domestic forecasts, which is really important, sets out policy intent well in advance of the budget, ensures people in Brussels or the Bundestag do not hear information before it is debated in our own Oireachtas, and reforms the budget process. As Senator Gilroy says, the recovery cannot just be felt at a macro level. While we do not agree on many things, I am sure Senator Kathryn Reilly would be pleased to hear me say that if she were here. I thank her for her comments on my own youth. In our own ways, we do our bit to represent young people in these Houses of the Oireachtas. She deprived me of the title of youngest Member of the Oireachtas, which is a title she wears well in doing a good job speaking up for younger people according to her own political ideology. Senator Reilly spoke about the low-paid, as did Senator Craughwell. It is an important issue. It is really important that when we see the results of the Low Pay Commission, action is taken to implement its recommendations. While the Government has restored the minimum wage, the best way to help any struggling worker is through tax reductions. There are possibilities to build on that. Senator Reilly also spoke about housing. The Government has launched the largest local authority building programme in the history of the State. I agree that the availability of housing and ensuring public and private supply is a real challenge. It is something on which my colleagues in the Department of the Environment, Community and Local Government, the Ministers, Deputies Alan Kelly and Paudie Coffey, are working.

Senator Colm Burke referred to demographic challenges and highlighted exactly why we need to plan. Challenges never go away in politics, they just change. We have a number of challenges coming down the tracks in relation to demographics. They relate to younger people and child care but also to pensions, health services and our education system. The spring economic statement enables us to plan for that. Senator Burke is quite correct that the self-employed need more support. There are anomalies and an unfairness in the income tax system for the self-employed, which is something the Taoiseach has personally committed to working with our colleagues in the Labour Party to address in the October budget. I was very pleased to hear Senator Burke say about housing supply that when we give money to local authorities, we must see that targets are met. We must keep a close eye on it.We have all seen instances of this. When money leaves the Oireachtas, there must be delivery on the ground. I am sure that we will work on this.

There are many other issues that I would like to touch on, but we have had an interesting debate. I thank Senator Craughwell for his balanced contribution as a constructive Independent. The one comment I would make about forecasting is that there have been changes. The forecasts in this document are endorsed by the Irish Fiscal Advisory Council, which is an important development, but the Senator is right in that we must constantly keep matters under review. I hope and expect that the spring economic statement will be an annual event. I look forward to debating the issues further. I am sorry that we could not get through them all. I thank the House for its time.

Michael Comiskey (Fine Gael)
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I am sorry, but it was the order of the House to conclude at 9 p.m. When is it proposed to sit again?

Paul Coghlan (Fine Gael)
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Ag leathuair tar éis a deich maidin amárach.