A Ceann Comhairle,
In six weeks from today, the Minister for Finance will deliver his second budget to Dáil Éireann.
When the Minister delivered Budget 2012, he did so nine months after this Government had inherited a disastrous situation- an economy in freefall, riddled with numerous systemic problems, with no clear path for recovery or leadership to deliver it.
When we recall the situation which this Government was faced with, we are reminded of the scale of the challenge:
250,000 private sector jobs lost in the three years before we took office;
Our international reputation was at an all time low;
Our property market was in free-fall;
We had massive capital flight from the country;
there was a steady bank run
Our output had been consistently falling and above all, the people were left behind to bear the brunt of the crisis. Emigration returned, and unemployment was allowed to reach record highs.
There was no clearly defined vision for the country, the situation was bleak and the people were left bereft of hope. Since day one, the task of this Government has been to regain control over Ireland’s fiscal and economic policies, to grow the economy again and to get people back to work.
Since taking office the Government has been systematically addressing each of these challenges. We have taken real and meaningful steps to stem the tide of the downward trends and to put Ireland back on a path to growth and recovery.
We have focussed much of our efforts on restoring International confidence in Ireland. All of the actions agreed under the EU-IMF Programme have been met. As a consequence International markets have recognised Ireland’s commitment to doing what is necessary to steer the economy back to recovery. Our long-term bond yields are now under 5% and the NTMA has been making a phased return to the bond markets.
We have successfully begun the process of restoring balance and order to our national finances. In 2011 the deficit fell to 9% against a target of 10.6%. This year we will reduce that deficit even further.
We have been restoring banking and financial stability. Banking deposits are up 10% from a low in July 2011 and we have seen a modest return to GDP growth of 1.4% in 2011. We have secured an EU commitment to making Ireland’s banking debt more sustainable, and to break the link between bank and sovereign debt- commitments which were reaffirmed at the European Council last week.
We have introduced a comprehensive restructuring and recapitalisation plan for the banking system in conjunction with reform and restructuring of bank boards and oversight structures. New legislation has been published to tackle White Collar Crime to restore confidence in our financial system.
Each of these measures has been taken to ensure that the conditions are right to allow growth to return to our economy and for prudent management to be restored. Without this we cannot move forward to address the most pressing part of our crisis- getting people back to work.
Given the scale of the crisis and the number of individuals and families affected, the Government has made this a top priority. Government’s priority must be to create the conditions for employment growth and to that end we have used every opportunity at our disposal to that end.
We want to make work pay. To reward people for an honest days work. To this end we have not increased income tax and in the last Budget went further to remove over 330,000 people from the universal charge.
In February we launched the Action Plan for Jobs, and unlike plans published in the past, we have made implementation our priority. We have been resolutely pursuing each and every target and action in that plan on a quarterly basis. We also announced a €2.25bn Infrastructure Stimulus Plan with the aim of creating 13,000 jobs.
We have undertaken this consolidation, reform and policy development, while protecting the most vulnerable. We know that a crisis like this leaves those who are already vulnerable most exposed and pushes many more into the trap of poverty. Cognisant of this, since taking office we have:
Reversed the cut in the minimum wage;
Published the National Carers’ Strategy and the Children first guidelines;
Allocated funding to community mental health teams; and
Provided additional mortgage interest relief for First Time Buyers who bought between 2004 and 2008.
Looking Ahead
With Budget 2013 six weeks away we are very aware that a huge amount of work and effort is still required to continue to get Ireland working again and to get our national finances back on a sustainable footing.
As a country we continue to spend far more than we collect in revenue.
While the banking crisis has clearly affected some of the forces which impact on our tax take such as confidence, demand and spending, the gap between what we collect and what we spend is an issue which must be dealt with.
It cannot be ignored. It cannot be magically fixed.
The Government has a plan for dealing with this deficit and we must see it through and allow the stability and confidence it will deliver to act as a platform for future growth in the economy.
Our commitment to reduce the deficit to below 3 % of GDP by 2015 remains central.
Further current expenditure savings must be found. We must deliver more savings and reforms under Croke Park. We must ensure that the reform of the public service delivers a world class offering for our people, which does not tolerate waste or inefficiency of any kind.
On the international front we will continue to pursue a successful conclusion to discussion at EU level for an agreement to separate bank debt from sovereign debt. This work continues and involves many different actors and results will be delivered in different ways in the coming months.
Against this backdrop we will continue to intensify all of our engagements at EU level.
We remain steadfast in our efforts to ensure that the euro is protected.
We will prioritise the pursuit of a banking union and will engage in robust discussions on an EU fiscal / political union.
EU presidency
During our Presidency of the European Union in 2013, one of my key messages will be to push for more EU growth measures. As a small, open, and export orientated economy it is in our national interest that Europe continues to develop the single market and promote trade and enterprise among the Member States and with other external economic blocs.
In this respect the Irish Presidency will be looking to advance further trade relations between the EU and the US along with other advanced and developing markets.
Within the EU we need to breakdown the barriers to trade and introduce new measures to facilitate rapidly growing areas such as the digital market and online commerce.
Jobs Market
At a domestic level next year, our focus will be on turning the stability we have fought so hard to achieve into jobs.
We want to build on the beginnings of recovery in employment that we have seen to date. There has been a 13,000 reduction in the Live Register over the last year and 17,000 extra private sector jobs have been created since we came into office. In the past few weeks we have also seen a number of significant jobs announcements.
These numbers are small in the context of the scale of the crisis, but they are moving in the right direction. Conditions in the labour market remain weak and long-term unemployment is a serious concern.
Thus we must continue to push hard to deliver the policies which will facilitate employment growth.
The new integrated employment and support service, Intreo, announced last week by Minister Burton will also provide individualised supports to jobseekers to assist them in getting back to work and increasing their employability.
This will ensure that those who have lost their jobs will remain connected to the labour market and will be ready to avail of opportunities when they emerge.
The 2013 Action Plan for jobs will see us redouble our efforts to ensure that every Government Minister, Department and Agency will make creating the necessary conditions for employment the number one priority.
Access to finance is a critical issue for small businesses. Last week we launched the Credit Guarantee Scheme which will facilitate lending to viable firms on the margins of commercial lending decisions in accessing credit. We will continue to focus our efforts on ensuring that viable businesses have the tools available for them to allow their day-to-day operations to operate as smoothly and effectively as possible.
Conclusion
The central focus of this Government is to get Ireland working again. It is the unifying goal of this coalition.
In doing so we are making sure we do not repeat the mistakes made in the past, and that difficult decisions are taken now which will benefit generations to
come.
A Ceann Comhairle, 18 months ago we assumed a public system in chaos, left adrift and rudderless by the previous administration.
Through sheer hard work and determination we have set the country on a new path to recovery.
We have only taken the first steps to stabilise the economy.
The next steps will be to strive on for growth and jobs.
The transition from the old, failed economy based on property, banking and debt to a new, sustainable economy based on enterprise, exports and innovation will not be easy.
But I have every confidence that the Ireland that emerges from this period of crisis will be stronger than ever.
Go raibh mhaith agat.