Is austerity working? YES

AFTER two-and-a-half years in office the Government is delivering on its plan to restore order to the public finances, to get the economy out of the crisis it was in and growing again, and to get people back to work.

From being forced to turn to the lenders of last resort in Nov 2010, Ireland’s recovery is well underway and, over the past two-and-a-half years, real progress has been made.

Supporting jobs and getting people back to work is our number one priority and is at the heart of our economic policies. We are making progress with jobs being created again and we are on track to emerge from the bailout at the end of the year and make a full and sustainable return to the financial markets.

Many challenges lie ahead and the Government will continue to be clear and honest about the scale of these challenges. Unlike others, we have never suggested there are any easy options. Families across the country have made significant sacrifices as we have sought to correct the mismanagement of the past. However, the recovery is under way and these sacrifices will not be in vain.

Stable public finances are an essential building block to accessing the financial markets, to growing the economy and to creating jobs. We all experienced the devastating impact of losing control of the public finances in 2010 and are living through the painstaking task of rebuilding and recovering. Slowly but surely we are making progress and the gap between what the State spends on public services and receives in tax receipts is narrowing. This year the gap stands at just over €12bn and the budget will again seek to reduce this gap in a manner which is fair, supports growth, rewards work and creates jobs.

The Government is committed to meeting our agreed deficit target for 2014 but the actual size of the adjustment which will best position the country for growth and jobs will not be decided until nearer budget day. By then we will have additional economic data to inform the decision.

The other side of the public finances relates to the debt. The success of our negotiations on the promissory note and the extension of maturities on our EU loans have reduced by €40bn the amount of money the State will have to borrow over the next decade. This is significant and, combined with the actions taken to stabilise our finances and get the economy growing again, means we have access again to money at rates that are sustainable and lower than the cost of borrowing before the crisis.

This has knock on benefits across the economy for businesses and consumers.

We do not want to put these important building blocks to a better future at risk, especially after all the sacrifices that people have made. Advocates of an alternative approach to dealing with our public finance must clearly outline how they will deal with the reality of Ireland’s deficit and debt position. The false prophets claim there is an easier way of correcting our economy and public finances but they are failing to be honest with the people.

They need to spell out how they will fund the essential health services, social welfare payments, and education supports the most vulnerable in our society are entirely dependent on. They also need to spell out the impact of the policies that they are advocating will have on investment, jobs, and growth both now and into the future.

The benefits of our policies are starting to emerge and are there for all to see. Following three years of contraction the Irish economy returned to growth in 2011, grew again in 2012 and a third consecutive year of growth is forecast for this year. This growth has been somewhat hampered by lower growth in our key customer countries.

However, our exports are of the highest quality and we are well positioned to benefit from improving conditions in the US, UK, and Europe. On the domestic front the key policy focus is jobs and the real measure of success will be delivering on our targets to get people back to work.

The most recent figures show overall employment levels grew by over 20,000 in the 12 months to the first quarter of this year, with the private sector adding 2,000 jobs per month. The unemployment rate at 13.5% in July, while unacceptably high, is the lowest rate of unemployment since April 2010 and, importantly, we are now moving in the right direction.

The action plan for jobs and Pathways to Work initiatives are designed to make further inroads into these numbers and in each budget I have introduced a range of measures to support key sectors of the economy and to support jobs across the country. This approach will continue in Budget 2014.

Outside of the budget process we are taking steps to attract and support investment in Ireland. The recently announced Ireland Strategic Investment Fund will make over €6bn available for investment in Ireland. Brendan Howlin, the public expenditure minister, also recently announced an exchequer-funded stimulus package of €150m that will support up to three thousand jobs across the country this year. Just last week the University of Limerick secured €100m in funding for their new campus from the European Investment Bank and international interest and investment in commercial property is very strong. These investments will support thousands of jobs and lead to real improvement.

Of course the Government has choices in the policy options that we implement. However, the choice to do nothing and hope that our problems disappear is not a valid option. Nor is misleading people by claiming that there is an easy alternative to the economic and fiscal adjustment that is currently under way.

This Government has chosen to place growth and jobs at the heart of our economic policy. There are still challenges to overcome, but we are on track and we will succeed.