Taoiseach Micheál Martin on the challenges facing our economy and society

This opening statement by Taoiseach Micheál Martin on his appearance before the Working Group of Committee Chairs last week outlined the challenges ahead for his Government
Taoiseach Micheál Martin on the challenges facing our economy and society

Taoiseach Micheál Martin. Picture:Maxwells

I WANT to recognise the important role of Oireachtas Committees in providing advice to the Houses of the Oireachtas on a range of matters in their sectoral areas, including on legislation, policy and the public finances. Their work is an essential support to and a great enabler of efficiency and effectiveness in the work of both Houses of the Oireachtas.

Today is an opportunity to discuss issues of interest to us all and I look forward to an interactive engagement.

Covid-19

This Government came into office in the midst of an unprecedented public health crisis. The pandemic affected every part of society and at all times, in seeking to protect the lives and health of our people, the Government was deeply conscious of the extraordinary burden that the necessary public health restrictions placed on everyone.

The unprecedented sacrifices made by people and our comprehensive vaccination programme unquestionably saved lives and reduced illness.

The very significant level of intervention by Government, to the tune of over €20 billion, was essential to support workers and businesses, and to protect the economy.

Ukraine and Cost of Living

With the pandemic receding, we saw economic and social recovery taking hold last year.

Unfortunately, with Russia’s illegal and immoral invasion of Ukraine, we now, again, face some uncertainty. Our first priority must be to provide protection for those fleeing the war in Ukraine and, as you know, very significant work has been and is being done to provide accommodation, income and other supports for people arriving here.

On the economic front, Russia’s war is disrupting international supply chains, increasing energy costs and damaging confidence in the global economy. 

The Government recognises the impacts on households and businesses, especially increasing energy and other prices.

We have already taken steps to ease the impact, through grants to households for energy costs, temporary reductions in excise duties and VAT on fuel, and substantial, targeted supports for those most vulnerable in receipt of the fuel allowance. We have also taken a number of measures to support heavily impacted sectors, including hauliers and farmers. In total, taking into account also the cost of living supports in Budget 2022, we have provided over €2 billion to help households, families and businesses.

Economic Developments

Over the past year, as the pandemic has receded, we have seen recovery take hold in our economy. Employment is now at record levels, accompanied by a strong rebound in consumer spending and in private investment. Growth in modified domestic demand, a good proxy for the domestic economy, was 6.5% in 2021.

2021 also saw substantial growth in Foreign Direct Investment, with the highest employment creation figures ever in a single year despite the challenge of Covid-19. Over half the new investments announced in 2021 went to regional locations, with FDI employment growth in every region.

2021 saw also the highest annual increase in jobs in our indigenous businesses supported by Enterprise Ireland. This took place in all regions, with almost 70% of new jobs occurring outside of Dublin and particularly strong growth in the north-west and south-east.

We continue to see a strong performance in exchequer returns, with underlying trends a positive sign of the strength of the domestic recovery. Our recovery has been supported by implementation of the Government’s Economic Recovery Plan, outlining how we are preparing our society, economy, and people, to seize the opportunities which are to come, in particular in the areas of green and digital, while striving to improve our quality of life and safeguard our continued prosperity.

Overall, despite international uncertainties and the challenges we face, we expect the economy to grow by about 4% this year, unemployment to fall to close to 5%, and a Government deficit of less than 1% - a remarkable performance which speaks to the resilience of our economy.

Housing

This, of course, remains a priority for the Government. In Housing for All, the Government set out our ambitions to transform the provision of housing in this country.

We aim to increase the supply of housing to an average of more than 33,000 units per year over the next decade. This is the largest ever multi-annual investment programme for housing, with in excess of €20 billion being made available through to 2026.

Climate Action

Climate action, and putting our environment back on a sustainable path, is also at the very centre of our work as a Government.

Climate action can enable us to protect the environment and develop new jobs and new sectors that can thrive in a decarbonised world.

No-one should underestimate the challenge in halving emissions by 2030 and achieving climate neutrality by 2050. 

In tackling this, we need to bring people with us through a just transition. That is one of the reasons the Government has committed to enhance social dialogue, to listen and engage deeply with employers, trade unions, and wider social partners, on the profound challenges we face.

Investing in Public Services (Health)

Our experience in the pandemic has underscored our deep appreciation for our public services, in particular our health service. We owe all who work in our health service a deep debt of gratitude. It is incumbent on us to redouble our efforts to support the transformation of our health service by implementing Sláintecare.

In 2022, we will spend a record €21 billion on health and social care services. This will allow us to reduce waiting lists, increase capacity, protect our most vulnerable, and deliver the right care, in the right place at the right time.

Conclusion

I could continue with many other policy priorities for Government but we have limited time. I look forward to hearing your contributions and engaging on the issues raised.

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