Speech by the Taoiseach, Enda Kenny TD IBEC President’s Dinner

The Journey to Recovery

There can be no doubt that we’re in a new phase in Ireland.

Even in the room tonight there’s a deeper optimism.
Across business people are starting to breathe again the belief is coming back.

And this new phase is welcome.

Because it’s not too long ago that jobs were being lost by the thousand.

The national finances were on the verge of collapse.

Ireland was hitting, in fact hogging the international headlines for all the wrong reasons.

For all of you, for Ireland the future was uncertain.

But as a nation we did what we’re good at. We faced up to the challenges head on.

Painful as it was, we knew what we had to do to bring Ireland back from the brink.

This Government, together with the people, implemented a recovery plan to bring us to where we are today.

Together, we restored our international reputation.
Together, we supported the changes to help create 125,000 extra jobs since 2012.

Together, we made Ireland Europe’s fastest growing economy.

Today, we are witnessing the fruits of that recovery.

The long term goal of reducing the deficit to under 3% of GDP will be achieved this year.

Given the very strong increases in growth it’s likely we’ll see our debt-to-GDP ratio fall below 100 per cent by the end of this year.

Our recovering economy is fuelling a surge in tax revenue.

In fact, after the first eight months of 2015, tax revenues are almost 10% higher on the same period last year.

This is an important time in our recovery.

Some people will look at these figures and shudder thinking ‘Oh god, here we go back to the political burlesque of
‘Showtime’.

The bravado of “If I have it, I’ll spend it.”

Except they can relax that’s not going to happen.

With this government we are never going back to boom and bust.

We are never going back to auction politics that actually sold off nothing except public trust and faith in politicians.

We know that this recovery is real, but it’s fragile and must be secured.

There are plenty of financial and political landmines out there and with government we need to keep the path that’s been tested and cleared.

Even now, despite our success, despite our growth, there are too many people who see the recovery only as a headline – not as something they live day to day.

Our job now is to make sure they do – that’s the next vital phase and for them our work and our plan are only beginning.

Budget 2016
We can be in no doubt that this is a critical phase.

Some have described the upcoming October Budget as the end of the recovery plan.

But actually it’s only the start.

It’s our first step to building a wide and deep recovery across every part of our country and society.

With our Budget it’s goodbye ‘Showtime’ – hello Stability.

Maybe not as glamorous but definitely more sensible.

This year for the first time the Government published a Spring Economic Statement.

Therefore, there is no mystery to this Budget.

The Spring Statement set out our plan for securing the recovery, for growing the economy and repairing the public finances.

Firstly, we need to create even more job opportunities, spread across the country.

That’s why we will take more measures to support both Irish entrepreneurship and foreign investment in this country.

We will protect and further our corporate tax regime to encourage more investment and job creation.

In advance of the Budget we will also publish a new comprehensive multi-year Capital Plan that will address many of the emerging infrastructural bottlenecks in the economy. This is essential for attracting new jobs and investment for our people.

Secondly, we’ll do more to make work pay and reward effort.

We cut income taxes in the budget last year, but the 51% tax rate on low and middle income earners is penally high.

It is bad for the recovery.

I have said that we will cut the 7% USC rate to bring the overall tax rate below 50% for this group.

And we will end the unfair tax treatment for the self-employed and small businesses, starting in this budget with those self-employed people on lower incomes.

We will also take the first steps of our plan to improve childcare quality and affordability, making it easier for parents to work to provide for their families.

As any parent here will know it’s all safety, reliability, affordability peace of mind.

Thirdly, we will continue to repair the public finances, while making enough room to protect services.

To avoid the mistakes of the past, our plan caps public spending growth at below the underlying growth rate of the economy.

As a result, the overall level of budget flexibility will remain between €1.2 billion to €1.5 billion with measures evenly split between tax reform and public expenditure.

If this rule had been applied during the period between 2000 to 2007, the unsustainable growth in public expenditure would have been halved, leaving the public finances in a much stronger position to protect our people from the impact of the credit-fuelled property boom and bust.

This requires difficult choices.

The National Economic dialogue conducted a few weeks ago in Dublin Castle has highlighted the huge amount of demands placed on the taxpayer.

5 Year Economic Plan
It is clear to everyone that there are many paths to choose from in the coming years.

Despite what some might lead you to believe, stability, economic growth, and job creation don’t just happen by chance.

Choices have consequences.

The upcoming General Election will ask the people of Ireland which choice they want to make, the path they will choose.

Our approach will be crystal clear. We will prioritise measures that help create more jobs and make work pay.

We will continue to prioritise stability in the economy – that will allow everyone, especially job creators, to plan for the future with confidence.

For this reason, in my capacity as leader of Fine Gael, I am committing this evening that as part of the upcoming general election campaign that Fine Gael will publish a detailed, fully costed 5 year economic plan.

Business and families want to know where they stand. They want to know they can plan.

This plan will deliver on our goals:
1. Replacing all the jobs lost during the recession and reducing unemployment to 6%;
2. Making work pay through a combination of cuts in the rate of tax on work, better and more affordable childcare and a higher minimum wage;
3. Protecting Ireland from future shocks by delivering a surplus in the public finances and reducing debt.

Given the ordeal the Irish people have endured during the downturn, they deserve to know what exactly the disparate groupings hoping for Government are proposing for the next 5 years.
It’s not good enough to tell people what you’re against. You need to tell people what you’re for and how you intend to get there.

I am confident that when the people examine the options before them that they will choose stability, progress and securing the recovery over ones that have ruined the economy or those that would ruin it.

Jobs
For our part we still have much unfinished business.

We need to finish the job of restoring all the jobs lost in the recession, where anybody who’s wants a job can get one.

When we launched the Action Plan for Jobs in 2012 unemployment peaked at over 15%.

The focus on rebuilding an enterprise focused economy, stabilising the national finances, and fixing the financial system has helped to create the environment where 125,000 new jobs have been created in the intervening years.

Job creation is now across all regions and all sectors.

But with unemployment still at 9.5% we must do more.

In February, we set out our Regional Action Plan for Jobs, a 5-year, €250million strategy aimed at accelerating jobs recovery throughout the country.

This is based on the principle that local knowledge and strengths need to be brought together under regional partnerships to deliver more for local areas.

As we enter this new phase of recovery, it is timely also to take a longer term perspective – to set a strategic framework for growth and job creation over the next decade.

I have asked the Minister for Jobs, Enterprise and Innovation, Richard Bruton T.D. to bring forward a longer-term Enterprise Strategy to Cabinet shortly.

This new Enterprise Policy 2025 will set the strategic framework for a competitive, export orientated economy that can support full employment.

Making Work Pay
Our 5 year plan will also continue the work we started to make work pay.

I have already mentioned how we intend to lower the penal tax burden on low and middle income earners.

But as more jobs are created again, now is the time to accelerate our welfare to work reform agenda, not to take the foot off the peddle.

The OECD this week again highlighted the structural unemployment problem we face.

I want to see people independent in work, not dependent on welfare. The Government believes that a job is the best route out of poverty, that work should pay, and that people shouldn’t be abandoned on the dole queues.

But this hasn’t been the case. There are far too many people out of work; some are trapped in cycles of joblessness and poverty from one generation to the next.

To break this cycle, work should always pay more than welfare, and no person in full-time work should be in poverty.

We need to rebalance the scales of fairness. We cannot stand by a system where unbalanced supports trap people into long term unemployment rather than supporting people in work.
During this Government’s first term we made a good start to transform our passive welfare system into an active employment service that works with people to get them into jobs.

But in the next Government we need to be more radical and do a lot more to provide large sections of Irish society the opportunity to access the world of work. We cannot repeat the mistakes of the past where the long term unemployed miss out on the chance to support themselves and their families in a recovering economy.

Conclusion
The past few years have been difficult for our country.

The emerging recovery has been hard won – thanks to you.

The opportunity is there now to secure it.

The Government that I lead has a plan to do just that.

There will be no going back to boom and bust – bad business as usual.

We must go on and improve and finish what we started.
To create jobs for our people, to create a strong economy that can support our vital public services, and to come out of this dark period even stronger than ever.

I want to thank you all for your hard work over these years.

I plan to put this Government’s case of continuing the path of stability, of jobs and growth to the people in the upcoming election, and with their decision, I hope to be back here next year to tell you how we’re securing this recovery for the long term interests of our country.