2018 will be better and brighter as we put Ireland at the centre of the world

Our small country continues to show great resilience in the face of extraordinary events, writes Finance Minister Paschal Donohoe

AS 2017 draws to a close, I am struck by the resilience of our small country in the face of extraordinary events both here and beyond our shores. Certainty abroad was in short supply.

These events have contrasted sharply with relative calmness at home. We have a new Taoiseach, the supply and confidence arrangement has survived and we have managed to steer a steady course for the country.

More people found work and left the dole queues. Emigrants returned home and new people came to live here. And while there is still much to do, we improved, and invested more in, public services and our country’s infrastructure, as anyone who travelled on Luas cross city or on the new M17 Gort to Tuam motorway will testify to.

Now, though, is the time to look forward. I believe next year will be a great one for our country; where we continue the progress made while doing all we can to guard against the risks we face.

I believe it is possible next year to achieve full employment. That could be an incredible position to find ourselves in, just six years after nearly one in six workers were unemployed.

The lesson of the jobs crisis — and how we solved it — is that steady progress is real progress. Next year, and in future years, we will use the same approach to the other problems we face.

Another important milestone that we will reach next year relates to the public finances. Some years ago, we were forced to go to the IMF to borrow tens of billions of euro just to keep our country going — to pay gardai and nurses, to ensure our schools could remain open.

Next year, we will broadly balance our books, returning again to the days when we can pay our way.

This is not only of interest to accountants and economists. By balancing the books, it means we start to reduce the costs of servicing our national debt, leaving more money for public services. This week, for example, will see loans from the IMF, Sweden and Denmark, drawn down during the crisis, paid back early and in full.

It is important for other rea- sons, too. A report published by the ESRI last week suggests that Irish households are most at risk from an increase in interest rates by the ECB. Should this happen, it will be important that we are doing all we can to ensure the economy is in the best possible shape so that people can be confident of finding work, holding on to their jobs and getting pay increases in the years to come.

Last week, the ESRI and Central Bank predicted the economy would grow at a stronger rate in 2018 than my own department predicts. This underlines the careful, sensible approach we are taking to the economy.

We will do all we can to avoid overheating in sectors of our economy — just as we did, for instance, in relation to the commercial property market in Budget 2018 — and do nothing to endanger the hardwon gains of the last few years.

But stability does not mean simply a continuation of the status quo and my vision for 2018 is far more ambitious than just protecting the gains we have collectively made.

Next year, just as I did in this year’s Budget, I intend to continue the process of tax reform by further increasing the point at which workers pay the top rate of tax. That means next year more people will be able to work a few hours’ overtime, or accept a pay rise, without having half the extra money they earn taken away in tax.

My vision for next year will also see us take the next step on the journey of national rebuilding, with the new and additional capital investment in 2018, increasing on the 2017 allocation. We will do this while also spending more on public services to help our society heal.

That means more for public transport, more for our health service and more investment in our schools and colleges.

A key element of our investment plans next year will be the 10-year capital plan that will map out how and where we will invest in our country to prepare us for the future.

Crucially, next year will see us make serious inroads into the most pressing problem of a generation — housing. I believe we cannot live up to the expectations of a modern democracy if we do not do all we can to ensure that everyone has shelter and a roof over their heads. We have already made progress, but in 2018 we must — and will — build more homes, tackle housing waiting lists and reduce homelessness. Our success in this area will be a mark of our success as a caring, compassionate country.

I believe we will be successful in this and much else. This three-track approach — balanced books, tax reform and increased investment — will help us be best placed to deal with the risks that may unfold next year and beyond, the biggest being Brexit.

My vision for the Ireland of 2018 is one that is fairer, gives everyone a chance at a better life and sees us remaining confident, welcoming and outward-looking. A country where more and more of us choose to live, work and raise a family. A country where we are confident to face — and face down — the risks at home and abroad. A country that is proudly European.

A country, as the Taoiseach put it, at the centre of the world.

We still have many problems to overcome and we cannot become complacent. But after several difficult years, our country is on the right track. Next year will see everyone with a little more money in their pocket, better public services, and increased investment in our infrastructure.

These improvements are gradual, but sustainable. That’s a recipe for a happy new year.

‘The 10-year plan will map out how we will prepare our country for the future’