Speech by the Taoiseach: MacGill Summer School

Good evening ladies and gentlemen. I’m delighted to be here. Thank you Joe Mulholland for inviting me.

Your theme this year is an apt one. Ireland is at the crossroads.

Across many cultures, not least our own, the crossroads is a very particular locus.

The crossroads is where we met, danced, waited and parted.

A no-man’s-land, a boundary, a burial ground, a place of sacrifice, execution, ritual, magic, or, for Oedipus, fate:
“Where three roads meet”.

No matter how haphazard or deliberate our arrival, once at the crossroads we are compelled to decide.
In times ahead we can retrace our steps, but we can never undo our initial decision of the road taken.

It was the Trivia herself who protected the crossroads in the ancient Roman world. Without dishonouring her I can assure you that there is nothing ‘trivial’ – in its everyday connotation – about the decision Ireland will make, the road it will take at the crossroads it is facing in 2016.

At the next election, the people will choose.

Will they choose the road to strengthened economic recovery – already mapped, cleared, tested? One that cherishes the sacrifice they have made?

Or will they take another road?

A road that’s possibly mined, and certainly unmapped, untested?
One that ignores their sacrifice, that gambles the recovery, that squanders their painstakingly-won security?

Will it be ‘Hello again’ to the old boom and bust, to the forced emigration of our children, to political and societal slash and burn, to the talented generations silo-ed into welfare, to the old political peep show with nothing to see but the impoverishment of its customer?

Or will it be a political freakshow, a government free-for-all, where it’s none for all and all for none?

Or will it be jobs, stability, caution; a plan that’s tested and proven; a plan that brings incremental prosperity; building, step by step, on the tangible developments, on the quantifiable improvements that at long last are starting to take hold across Ireland?

At the crossroads, that is the choice the people face.
And I hope that for their own sake and the sake of their children, they will choose stability.

They will choose to build on success. They will choose a government that cherishes the sacrifice they made.

Because we cannot underestimate the trauma the people have suffered during the crisis. As I said on my first day as Taoiseach it damaged us not alone economically and psychologically but at the level of the soul, the spirit, the psyche.

For the people this was not just a financial phenomenon, a national or global headline. For the people it was a series of years, a portion of their lives, and, crucially, a significant portion of their children’s lives, lived sometimes in great difficulty. Years that are over. Years they will never get back.

So when I say ‘never again’, when I say with this government that we are never going back to those days of boom and bust,
I say it to recognise what the country has been through and to do everything I can – all in my power – to make sure that as an economy, a society, we never have to go through it again.

So yes, we are creating the right jobs. Yes, we are attracting the right investment. Yes, we are hell-bent on building a healthy, thriving economy.

And no, we are never going back to boom, bust, beggared and betrayed, be it through property, political pride, popularity, or anything else.

Because in the government-backed property Ponzi scheme, it was the people who paid.

The tsunami of public spending, based on unsustainable taxes, left them drowning.

And in the bailout that ensued, their dignity and economic sovereignty were sold.

This was no sudden financial death.

It took a decade of Fianna Fáil’s bad and worse economic habits to bring the country to its knees and the Troika to the door.

They set up the closed shop that was social partnership, a Byzantine little business with big consequences. Closed doors.
Chosen few. Accountability exiled.

In contrast the Fine Gael/Labour government introduced an entirely new Budgetary process that is transparent and accountable.

The new Spring Economic Statement process contains a robust five-year plan for the public finances.

The National Economic Dialogue last week in Dublin Castle saw people have their say, in an open forum, on how Government should manage the national finances.

For our part we will make our decisions responsibly, accountably, and always in the best interest of the country.

That is why we are never going back to the self-serving budgets of “when we have it we spend it”.

Because, unlike previous administrations, we will not be making reckless commitments with the public purse

Instead our plan caps annual spending-growth below the underlying growth-rate of the economy.

If this rule had been applied during the period 2000 to 2007, the unsustainable growth in public spending would have been halved.

It could have saved the public finances.

It could have saved our people, families, businesses from the boom-and-bust trauma from which they are only now gradually starting to recover.

Yes, that recovery is measurable and palpable.

Government borrowing has plummeted.

Interest rates on our debt are at all-time lows.

But that recovery is dependent now on common sense and caution.

That recovery is dependent on a government plan that is already functioning and tested.

Because the fact is: we are recover-ing.

We have not yet fully recovered.
Our recent progress cannot be taken for granted.

A populist financial step – a false political dawn – could easily undo it.

Even now our deficit and debt remain too high and must, if we are to prosper, be brought down further.

I am confident that steady economic growth, supported by our pro-enterprise policies, will eliminate the remaining deficit and reduce Government debt to below average European levels.

Earlier this week, the Government confirmed that budget measures will be contained between €1.2 billion and €1.5 billon for 2016.

They will be evenly, sustainably divided between tax cuts and improved services, in the public interest.

Despite the stronger-than-expected performance of the public finances since the Spring Economic Statement, we are keeping our political heads and continuing to exercise fiscal caution.

If we go on as we have been, if we stick to the plan, if we are consistent with the Expenditure Rule, we should see a significant reduction in our borrowing levels next year.

We are doing all of this because we believe that never again must the state of the public finances paralyse or terrorise the people of this country.

Building an Enterprise Economy

That consistency in our approach to the public finances is equally critical when it comes to creating the jobs that will bring our children home.

That’s why it’s not ‘events,’ but jobs, that keep us up at night.

Creating jobs in every sector, in every part of Ireland, is the number one priority for Government.

I believe we can replace all the jobs destroyed during the crisis, and do it by 2018.

It’s ambitious. But with our plan, we have already shown it is achievable.

Obviously, there are no short-cuts to sustainable full employment.

The previous government, who want to be the next government, talked about full employment.

But the construction they relied on was itself an economic construct.

A construct that collapsed, leaving hundreds of thousands without an income, a job, or hope.

Usually young men – and often not-so young men – holding not their new son or daughter, or their grandchildren’s hands, but a boarding pass or a ferry ticket, for Australia, the US or the UK.

For their sake – for the country’s sake – never again.

That’s why I’m glad to say our Action Plan for Jobs is robust.

It’s designed to support all sectors, to grow exports, and to attract more investment and skills.

Targeted actions across the various sectors are already working.

Take tourism, so crucial to our economy.

By lowering the VAT rate, abolishing the travel tax and developing initiatives such as the Gathering and the Wild Atlantic Way, we’re attracting visitors in record numbers, creating 30,000 extra jobs in the process.

Exports in agri-foods are now at record levels and we have specific plans to develop them further.

After food comes finance, and we have particular plans for the international financial-services sector, which is growing in scale and value.

When it comes to our entrepreneurs, we plan to double the jobs in start-ups over the next five years.

While exports and related jobs by Irish companies are at an all-time high, we’re working hard to attract more foreign direct investment.

With our reputation restored, with the record we are creating, I’m glad to say it’s getting easier.

For example even in recent months there’ve been significant announcements from Apple, Vodafone and Yahoo.

Just a few days ago, Pramerica announced a further expansion of its operations here in Donegal, an expansion that will see creation of at least 330 new, quality jobs in this county.

That is a massive vote of confidence in the talent and reliability of the workforce in Donegal.

When we launched the Action Plan for Jobs we set out to create 10,000 new jobs by 2016.

According to the CSO, we’ve already beaten that.

By next year, we want to make sure that more people are coming home to work than leaving to look for work. What would be a more fitting legacy for 2016 than to see families and communities reunited by the return of our young people from abroad?

By 2018, we aim to have replaced every job lost during the recession with new, sustainable jobs.

By 2019, we aim to have more people working in Ireland than ever before.

If you want to work, you’ll be able to work.

But to do any of this means Ireland needs a government that will go on making the right choices.

A government that will protect our 12.5% rate of corporation tax and keep taxes on jobs and business low.

A government that will end the unfair tax treatment of the self-employed and people who run small businesses, starting in the next Budget. One that invests in our infrastructure to address emerging bottlenecks.

There is of course a long way to go.

Ireland is a small, open economy and we must always be nimble and competitive to survive.

Our competitiveness has been significantly boosted by record low-interest rates and favourable currency exchange rates.

But these advantages are temporary and we cannot rebuild a competitive economy on these factors alone.

We need to keep costs down for enterprise – encourage competition in key markets, such as energy.

We must continue to challenge outdated structures that impose excessive costs on businesses. That’s why, for example, we will enact the Legal Services Bill by October.

Commentators and the opposition talk about economic reforms, but run when they come up against organised resistance to the necessary change.

But we cannot run. At the first signs of economy recovery we cannot allow the ladder to be pulled up from those left behind.

Because the reality is that there are still too many people out of work.

There are still too many people for whom the recovery is still a headline, who have yet to feel it and see it in their lives day to day. And that is a challenge.

We also need to face the challenges of tax.

Many of our sons and daughters are now working in good jobs in the UK, Canada, Australia.

In each of those countries people on average earnings get to keep far more of their pay than they would in Ireland.

Today, in Ireland if you’re earning €33,800 you’ll hit the 51% rate of tax.

Not only does it make it harder to get our sons and daughters to come home to work.

It makes it harder to attract the people with the skills necessary to attract investment.

In Budget 2015 we took the first small step to fix this.

This type of tax reform is also essential to reducing the number of jobless households in this country, which even before the recession was twice the EU average.

It’s a reform that releases people from the previous government’s welfare trap: a trap that impoverished them and their families, not only financially, but frequently in terms of expectation, ambition and hope.

In terms of pay itself, following the recommendation of the Low Pay Commission, the Government will introduce a package of measures in the October Budget.

Combined with ongoing reforms to our welfare system to get people off the dole, the Budget will make sure that work will always be a better option than welfare.

Crucially, the Budget will continue to reduce the burden of the Universal Social Charge on working families.

The USC was introduced by the previous Government as an emergency tax on working families.

It has led to middle-income Irish workers facing among the highest marginal tax rates in the industrialised world. People on relatively modest incomes are now paying a marginal tax rate of 51%.

Following the income tax and USC cuts of earlier this year, we will cut the 7% rate of USC in the forthcoming Budget. In doing so, we will bring down the marginal rate of tax paid by people earning less than €70,000 to less than 50%.

By steadily reducing the high marginal tax rate in this way, we will not only put more cash into the pockets of working families, but we will make Ireland an excellent prospect for investors and workers alike.

It’s the virtuous circle: more jobs – less tax on work – more money in the pocket – more spending – more jobs.

But the tax issue is not the only barrier we must tackle for working families.

The GP card for under 6s, which parents tell me are making a big difference to them, was the first step to free GP care for the children of all working families.

Earlier this week we published an ambitious plan to expand early-childhood education and reduce childcare costs, with the first steps to make that happen to be taken in the coming Budget.

Conclusion

So: crossroads.

This is the last MacGill Summer School before the next general election, and the choice at that crossroads will be clear.

The road to chaos and instability with a government that was tested and failed – or with a government that promises to do everything, though it hasn’t been tested at all –

or will Ireland choose the road to stability, security, prosperity and growing peace-of-mind?

Led by a coherent government, a government that has been tested and has succeeded – because it is a government with a plan that works.

Since becoming Taoiseach and meeting hundreds of thousands of people all over the country, what has struck me most in the first and critical phase of our recovery is that yes -we rear our children to have careers, to be successful.

But equally, we rear them to be ‘good people’ – to enjoy and help create what for our country, our society is ‘a good life’.

As any parent here can attest, our children are the life and light of our home.

They leave, and their absence becomes its own presence.

It is the same for our country.

As Taoiseach and as a father, I believe there can be no better life for Ireland than with our children in it.

That’s why I want 2016 to be our own year of family reunification, where our children come home at last from Melbourne or London or New York.

To an economy where they have work. Good work. To a society where they can build and live ‘a good life’. To a country reaching its potential, led by ‘good’ government.

I say to the people of Ireland – you are at the crossroads. Keep your eyes now on our fragile recovery. Remember what you lost, what you went without, the sacrifices you made to achieve it. Think of the home – the Ireland – you want to create.

A volatile Ireland, of chaos, or boom-and-bust, offered by the Opposition?

Or a stable, secure, recovering Ireland offered by the Government?

An Ireland where you, your children and their children can have ‘a good life’ – a fulfilling, hopeful and prosperous future.

At the crossroads the choice is yours.

I believe that people will choose the recovery, choose jobs, choose prosperity, and peace of mind.