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Leaders' Questions (Continued)

Tuesday, 3 July 2018

Dáil Éireann Debate
Vol. 971 No. 1

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(Speaker Continuing)

[Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin] Every day I can identify the social needs that need to be met. Inaction in addressing these issues is not defensible. The State is not like a household or company in terms of saving money. A private household or company can save its money in a bank and the bank will reinvest it in the economy. The State is so large that inaction has as much effect as an action. If, as the Government proposes, the State does not spend €500 million and puts it in a rainy day fund, that is not a neutral action. It is a large dose of inaction that will shrink the economy in proportion and lower its future trajectory.

The Labour Party's hands were obviously tied in government by the scale of the national debt and the size of the deficit we faced in 2011. Following that painful period, the economy has grown rapidly and we have growing employment. If not now, when can the people of Ireland expect to see the necessary investment in all the social provision that every Deputy in this House could outline, including the Government's backbenchers? These services are necessary, not optional, to maintain both our social fabric and a growing economy. By creating the so-called rainy day fund, Government inaction will result in weaker public services and a permanent loss of the potential growth that spending could create.

If the €500 million rainy day fund is to be created rather than investing in all the social needs I and others have outlined, where will it go? Where will the rainy day fund be put?

The Tánaiste: Information on Simon Coveney Zoom on Simon Coveney I have heard the Deputy raise this question before. To be honest, I was a little surprised by his argumentation given his knowledge of what it is like to try to steer a country through a financial crisis. That is what Deputy Howlin had to do when he was Minister for Public Expenditure and Reform and, by the way, I think he did it very well. People forget very quickly what it is like when nobody is willing to lend us any money and we have to access emergency funds. Fianna Fáil knows what that is like due to the failures of its policy, which resulted in the IMF having to come to Ireland to put emergency funding in place. It seems like we are a long way from there now.

Next year, we are planning to spend an extra €3.4 billion in terms of the kind of service delivery the Deputy is asking for in housing, healthcare, transportation, education and so on. That is a massive increase in expenditure in one year. We are seeing a dramatic increase in capital expenditure in particular because we know there has been a deficit in expenditure for nearly a decade now.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin Where is the rainy day fund being put?

The Tánaiste: Information on Simon Coveney Zoom on Simon Coveney The €3.4 billion is in our view what the country should be spending next year, recognising the fact that we now have a strong economy with the capacity to fund that kind of increased expenditure. However, we are not in the business of borrowing more money and increasing national debt at a time when we should be trying to reduce it so that if in the future the economy faces a shock to which the Government needs to respond, we do not have the kind of debt that fortunately we did not have when we had to respond to the last financial crisis the country had to deal with. Personal and national indebtedness are things we need to work on and we need to increase expenditure dramatically to make up for a lack of capital investment in particular in recent years and we are committed to doing that. Over the next ten years, we will spend €116 billion on a capital expenditure programme, going from spending considerably less than the European average to spending considerably more in that period.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin I asked about the rainy day fund.

The Tánaiste: Information on Simon Coveney Zoom on Simon Coveney The €500 million rainy day fund is not part of that €3.4 billion. It is a prudent, sensible measure that has been recommended and supported in government to ensure that we do put some money aside in case we have shocks in the future to which the Government needs to respond in a responsible way.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin The country has put money aside. Under the Ireland Strategic Investment Fund, there is €20 billion of directed and undirected funds available to the Minister for Finance. My question is directly about the rainy day fund.


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