SPRING STATEMENT THE FIRST STEP IN SETTING THE GOVERNMENT'S ECONOMIC PLAN UNTIL 2020 - KENNY

Posted on April 30, 2015 3:21 PM   |   Permanent Link   

Speaking on the Spring Economic Statement




The Spring Economic Statement is not next year's Budget, and does not contain the sort of detail or specifics of a budget. It is a picture of the Irish economy at this point in time, Spring of 2015. It is about stating where we are now, and how that compares to where we have come from. It is about stating where we want to go as a country.
The Spring Statement is the first step that indicates the Government's strategy for managing the economy until the year 2020, and making the most of the economic upturn that is thankfully under way, so that opportunities for our people, our society and our economy can be provided.




However, the economic upswing is at a point where the Government has the economic flexibility to change and improve some of the things that people want to see changed and improved. As legislators, we can't implement all of the things we'd like to change and improve - we simply do not have the resources to do that. The Government, at the next Budget, will have between €1.2bn and €1.5bn - which can be used in a sensible and sustainable way, given the strength of the performance of the economy at the moment.




So we must manage this extra €1.2bn and €1.5bn, and a public discussion will be had, in full public view, in the National Economic Dialogue in Dublin Castle in the early summer.




I must admit, when I returned to the Dáil in 2011 after over a decade away, I wondered what exactly we would be seeing in 2015 - would things be as dark as they were in 2011 or would things be better? I am very happy to say that things are better - much, much better than they were in 2011. The Department of Finance is now predicting 4% growth in the economy this year. If this prediction is met, Ireland will once again rate as the fastest-growing economy in the European Union.




Consumer spending is up. Business investment is up. Our national debt as a percentage of GDP is falling fast. Our budget targets have been exceeded again. Most importantly, employment is continuing to rise and unemployment continues to fall.




In the last Budget, the Government reduced the marginal rate of tax for people earning less than €70,000 and raised the level of income at which the marginal rate is payable.




This will, broadly speaking, continue to be the approach in terms of the taxation package for 2016. Low and middle-income earners will continue to be the priority, continuing to remove the low-paid out of the USC net and progressively lowering taxes for those on middle incomes. We will also implement an increase in the National Minimum Wage if that is recommended by the Low Pay Commission.




The crisis greatly reduced the scope to improve services - it was a case of protecting them as best as we possibly could while fighting to regain our economic sovereignty.




In this year's Budget, we made provision for more nurses, more teachers, and more special needs assistants. We are also recruiting new Gardaí for the first time since the collapse of the economy.




All of this has come about as a new way of managing economic policy. The old style Fianna Fail way of spending and splurging on an unsustainable boom and then cutting like hell when the boom turns to bust had to stop.




I remember when I was a member of this House in the 1990's, when the then coalition Government had gotten the economy back on track. And I remember after that time, when FF took the reins of power in 1997. By the time they were forced to give up those reins in 2011, Fianna Fail had made such a disaster of the economy, the Troika of the European Central Bank, the European Commission and the IMF had to be called in.




This Government, again a coalition, has seen off the Troika, and it has seen off the reckless Fianna Fail economic model as well - the new economic model is one of prudence and of forward planning.




As for Sinn Féin, I believe that despite their protestations they know and understand what the Government is doing. They are in Government in the North of Ireland, and they know what it is like to govern - and they know what it is like to have to make cuts - because they do it too - and not just any cuts. They are implementing cuts made by the Tory Party, governing from Westminster - and they just get on with it, without a protest at what they are expected to do as members of the devolved Assembly. The political approach of Sinn Féin is to propose one set of politics in 26 counties, while implementing the opposite in the other 6 counties.




Our country is in a much better place than it was four years ago when this Government took office. Despite the positivity, the recovery is not yet secure. There may be setbacks, whether at home, or abroad. We would like to think that this will not happen - and it hopefully will not - but it might, and a good Government will be prepared for it - Fianna Fáil never were prepared for it, and I do not believe Sinn Fein would be either.




This country needs stable government and responsible management of the economy. It needs parties in government who, even if there are bumps in the road at some points, are able and willing to face up to the social challenges of our time.




We do not need, and cannot afford, the instability and mismanagement that would be inevitable if Fianna Fáil and Sinn Fein were in government.