National Recovery Plan 2011-2014: Motion

Tuesday, 30 November 2010

Seanad Éireann Debate
Vol. 206 No. 1

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Senator Ivana Bacik: Information on Ivana Bacik Zoom on Ivana Bacik I move:

That Seanad Éireann:

notes that the Government’’s four year plan published on 24 November 2010 contains nothing by way of concrete measures to restore employment;

further notes that every job lost costs the State €20,000 a year in tax forgone and direct payments, and that the number of jobs lost since 2007 now stands at 288,000 costing the Exchequer an additional €5.8 billion per annum;

believes that unless there is concerted action by the Government on a comprehensive jobs strategy there can be no hope for recovery in the Irish economy;

regrets the fact that the Government is so overwhelmed by the banking crisis that it has lost sight of the key role it must play in promoting a growth-led strategy, rather than one which is focused exclusively on the necessary fiscal adjustment; and

calls on the Government to establish a strategic Investment bank to fund viable businesses around the country and invest in strategic infrastructure projects, bringing forward coherent sectoral strategies in areas such as tourism, food, cleantech and the creative industries, re-invigorating the State agencies, including the county enterprise boards, ensuring the provision of high-speed broadband, and giving greater priority to support for applied research to support the commercialisation of new knowledge.

I welcome the Minister of State to the House. We welcome the opportunity to have this debate as debate on this issue has been lacking on the Government side in recent weeks and days. All the focus currently, as it should be, is on the appalling news of the bailout we have been forced into from the IMF, the European Union and the ECB, on the cutbacks the Government will impose, and on the so-called national recovery plan — a real misnomer — the Government has published. We are in the international news for all the wrong reasons. It is clear the Government has sold us out and sold our sovereignty for the sake of propping up a few zombie banks and for the sake of honouring a guarantee that should not have been given in September 2008. It is of no pleasure to those of us who voted against the bank guarantee in 2008 to see that we were right about the appalling consequences it has had in terms of signing us up to an unconditional guarantee for the enormous and mind-boggling level of private losses we now realise the banks sustained over those years.

The words spoken by economist Paul Krugman at the weekend were clear. He said that what we had done in Ireland was to make our private losses into public obligations. The Government is responsible for that and that is the reason our sovereignty has now been sold out to international institutions. It is a sorry and sad day when we see the IMF and the European Union [37]dictating terms to us, as they are doing no matter what the Government says. In the midst of all of this extraordinary political change and development, the Labour Party suggests there has been insufficient focus by the Government on the crucial issue of job creation. This is the real focus of our motion.

The Government’s four year plan, published on 24 November, contains nothing by way of concrete measures to restore employment. It talks about a growth strategy, but there can be no growth. International institutions are pouring scorn on the Government’s projections for growth. There cannot be a growth strategy unless there is a strategy to tackle unemployment and job creation. That is the reality. Nothing was said about the need for investment and a stimulus in creating jobs. We cannot divorce the jobs or unemployment crisis from the fiscal crisis. The Government previously attempted to divorce the banking crisis from the deficit crisis by pretending the two were separate, but we were driven into the arms of the international institutions by the banking crisis. Equally, the unemployment crisis has an enormous impact on the economic crisis and the deficit.

The Labour Party motion notes that every job lost costs the State €20,000 a year in tax forgone and direct payments. Since the 2007 general election 288,000 jobs have been lost at an additional cost to the Exchequer of €5.8 billion per annum. That stark economic figure masks the human and social costs each job loss represents. Each of us has friends or family members who have lost jobs since 2007 or been forced to emigrate as a direct result of the Government’s economic policies. Unless the Government takes concerted action on a comprehensive jobs strategy, we cannot hope for recovery or sustainable growth in the economy. We regret that it has become so overwhelmed by the banking crisis that it has lost sight of the key role it must play in promoting a growth-led strategy. Its rhetoric is focused on fiscal adjustment and cuts to public services. The plan gives no hint of a commitment to job creation.

Last Saturday the Labour Party finance spokesperson, Deputy Burton, organised a pre-budget seminar which, like all my party’s policies, focused on job creation. It included excellent presentations by economists such as Marie Sherlock and John Martin of the OECD who spoke about the need to retrain the unemployed and target particular groups such as the large numbers of young men who had left school early to work in the construction sector during the boom years. While they may have completed apprenticeships, their training was narrowly focused and, in many cases, left them with difficulties in terms of basic literacy and other skills.

These issues draw our attention to the need to restructure FÁS. It is unfortunate that the crisis in the economy took place at the same time as the immense crisis of confidence in that organisation because we desperately need a coherent public employment and retraining service which can co-ordinate apprenticeship programmes and expand the short-term course offered by FÁS in the boom years. Apprenticeship courses should be more holistic and less vocational in nature. Trainees should be given a general education which would include literacy skills in order that they would be better able to take up jobs in the sectors that remain productive.

The Opposition does not dispute the Government’s claim that some areas are enjoying growth, but we need a concerted strategy to support continued growth. There is insufficient focus on developing the indigenous manufacturing and export-led sectors which have the potential to achieve sustained profitability and job creation. There is also a lack of commitment to areas which economists have identified as offering the potential to achieve further growth. They include health care, insurance and small-scale construction. For example, retrofitting could make homes more energy efficient. The big construction projects have come to an end, with the unfortunate result that a number of architecture firms have closed, but home improvement projects offer opportunities to construction related businesses. Again, however, they need support.

[38]The Labour Party has pointed to the need to ensure adequate credit flows to the small businesses which can support job creation, even during the recession. These businesses are being starved of credit. During the debate on NAMA, the Minister for Finance promised that a credit ombudsman mechanism would be established. France has established a very successful independent ombudsman model to which small businesses can appeal if they are unreasonably refused credit by their banks. I ask the Minister of State at the Department of Enterprise, Trade and Innovation whether the Irish version has enjoyed much success, given that it appears to many of us that banks continue to refuse loans to small businesses. We need to know why the ombudsman has not been effective because this is a means by which we can support the small businesses which employ large numbers of people.

The motion calls on the Government to establish a strategic investment bank. This is a major element of the Labour Party’s economic policies. Such a bank would fund viable businesses and invest in strategic infrastructural projects. Under the new national development plan which my party has promised, we would prioritise labour intensive projects such as the schools building programme which did not use the total capital allocated to it, even though this is an area in which the Government could be stimulating growth and job creation. The bank would also bring forward coherent sectoral strategies in various areas, including tourism, food, clean technology and creative industries, reinvigorate State agencies and facilitate the provision of high speed broadband services. The biotechnology and pharmaceutical industry has strong potential to achieve profitability and sustainable growth, but it needs to be targeted for job creation.

We cannot support the Government’s amendment to the motion which proposes that the Seanad endorse the national recovery plan. I am amused by the suggestion made in the amendment that we must recognise the measures taken to ensure the continued operation of a sustainable banking sector. If we did not know it already, the IMF and the European Union have told us that the banking sector, as currently organised, is far from sustainable. We have long been calling for Anglo Irish Bank to be wound down and this is now going to happen. Given that the Government’s economic policies have failed to the point where we have had to seek outside help, to suggest the national recovery plan is a pragmatic or achievable roadmap for sustainable growth is laughable.

Perhaps the Minister of State might clarify certain reports that have appeared in the newspapers. We have not yet seen the memorandum of understanding agreed with the IMF, the European Union and the ECB, but the national recovery plan which we have seen was designed for a different purpose. It was not designed to fulfil the requirements of the IMF and the EU. The memorandum of understanding will dictate the terms of the budget and of economic policy over the next four years because the Government is planning it, but in practice it will not be the Government that will implement it in the years to come.

There is plenty more I could say on job creation, which my colleague, Senator Prendergast, will address. The Labour Party’s motion and its policy generally is to focus on job creation and on the need to stimulate growth in the economy and not to proceed in the short-sighted way the Government is doing in focusing only on cutbacks and savings rather than on stimulus measures.

Senator Phil Prendergast: Information on Phil Prendergast Zoom on Phil Prendergast I second the motion. Its main focus is jobs. From the beginning of the economic crisis the Labour Party has emphasised that jobs are the key to recovery. Every person who loses a job is another person on the dole queue, another person who might have a difficulty in repaying his or her mortgage, and many people have that difficulty. Every time a job is created the Exchequer benefits through income tax and more money being spent in shops and small businesses throughout the country. It is that simple.

[39]I, with my colleagues, was very surprised on the release of the Government’s four year plan to note there were no concrete proposals in it to promote job creation and create economic growth. The focus of the plan and the Government has been on cuts and tax increases rather than on getting people back to work. It was an opportunity we had to make a difference to the lives of many people who are out work.

We recognise the need to balance our fiscal position in the next few years and none of us is under the illusion that will be easy. We will be unable to achieve our goals without a concerted and focused effort on getting Ireland working again. Unless the fiscal adjustments outlined in the four year plan are accompanied by a jobs strategy, there is a serious threat that the cure will kill the patient. I do not like to say that but it is a fact which has been written and spoken about on many occasions since the plan was published.

It is unfortunate there will be cuts to the public capital investment programme but what is more unfortunate is that no alternative strategy has been set aside to replace the spending from other sources such as through a strategic investment bank, a bank which would have supported investment in small and medium enterprises and assisted in the funding of infrastructure.

Since the four year plan was released, many members of the business community have made the point that the lack of funds available for capital and innovation will damage Ireland’s competitiveness and attractiveness as a location for foreign direct investment. According to a survey of 200 Irish business leaders by Ernst and Young last week, fewer than a third believe that Fianna Fáil’s four year plan will restore competitiveness and jobs growth.

A friend of mine who has been in business for many years was refused an overdraft facility of €3,000 by her bank. She has been in business for 27 years. I cannot understand how someone who has had a business for 27 years could be refused such an overdraft facility by her bank. She was told by her bank that it did not have the capital to grant her the facility. It is sad that is the case.

To restore jobs and competitiveness, we need a sustained programme of investment in the right capital, namely, transport, energy, communications and innovation, but the four year plan fails to address this. What is worse, rather than ignoring the fact that we badly need to get people back to work through the types of measures outlined in this motion, the Government decided to break the piggy bank by putting billions of euro from the National Pensions Reserve Fund on the table during its game of poker with the IMF and then it broke the piggy bank now that this money has gone. A large amount of this money is to be cleaned out of the fund and handed over for the benefit of the banks. As Senator Bacik stated, we all know where we are at with the banks.

The Labour Party outlined a number of innovative and practical ideas for how we can stimulate job creation and growth by using only a portion of the money in our National Pensions Reserve Fund. The four year plan does not embrace any of those ideas. The Labour Party’s proposal for a strategic investment bank aims to make a major contribution to the immediate task of promoting recovery while also playing a central role in transforming and restoring this country to an export-led growth model. To achieve that goal we need to do more than tax and cut. We need finance for investment in infrastructure for our 21st century knowledge economy and finance for investment in the Irish businesses that will grow up around that infrastructure.

The Labour Party’s proposal for a strategic investment bank is set out in our policy paper, Investing in our Future. Our proposal is that a strategic investment bank would be based on the twin models of the German investment bank and on the Irish experience with the ICC and the ACC, both of which are successful models with proven track records.

Despite the many problems we face, we can and should be optimistic about the future of our country because we live in a time of great economic change. At such times, great innovation [40]and a seismic shift in thinking can occur but we should be driven by technological advances which present great opportunities if we seize them. The stale outlook of the Government, however, proves that it is unable to think in the innovative way needed to promote jobs. Successive CSO figures have painted a grim picture of the appalling jobs crisis that confronts us. In south Tipperary alone, more than 2,500 people under the age of 25 are out of work. That is a sad reflection and that level of unemployment is replicated throughout the country, as the Minister of State is aware.

The level of unemployment is neither morally nor economically sustainable because we are losing a generation of young people. The parents of many young people of my son’s age and others have gone through the process of rearing them and have given them a college education for export. That is sad. Young people have ideas, the education and the confidence to be the future entrepreneurs and innovators who could pave the way to a prosperous future. We all know families who are facing into the most difficult Christmas period in decades because they have found themselves out of a job. It is heartbreaking for them.

Although the Labour Party’s proposal for a strategic investment bank brings with it many opportunities, the main focus of this motion is jobs. The proposal is balanced, fair and necessary if we are to have any hope at the beginning of this plan of saving our country from the economic mire over the next four years.

I note in an amendment to the motion a reference to, among other measures, continuing the car scrappage deal. I acknowledge the car industry has had a bumper year, if Members will pardon the pun, on foot of the benefits of this measure. That is good for the industry as many people are employed in it, but cars are not manufactured in Ireland and therefore there is no economic boost from that measure in terms of it having a job creation aspect. I await with interest the Minister of State’s reply to the motion.

Senator Marc MacSharry: Information on Marc MacSharry Zoom on Marc MacSharry I move amendment No. 1:

To delete all words after “Seanad Éireann” and substitute the following:

“endorses the National Recovery Plan as a strategy for economic recovery with the aim of restoring stability to the public finances, improving Ireland’s cost competitiveness, stimulating enterprise growth and job creation. And in particular:

supports the competitiveness and growth initiatives outlined in the National Recovery Plan designed to spur further improvements in competitiveness across all sectors of the economy, including measures to cut costs in energy, waste and transport, professional fees, property and labour;

welcomes the specific sectoral policies to foster export growth and a recovery of domestic demand;

endorses the commitment to maintaining an overall competitive tax regime and in particular to maintaining the 12.5% corporation tax rate, the cornerstone of Irish industrial policy;

welcomes the investment of €2.2 billion capital over the four years of the plan for the enterprise agencies which will enable them to create jobs across the economy through:

supporting indigenous firms to increase exports,

[41]winning new foreign investment, and

targeting and supporting research, development and innovation in companies to boost productivity, exports, growth and jobs;

recognises the measures taken to ensure the continued operation of a sustainable banking sector as a provider of credit to viable enterprises in the State;

notes that our EU and international partners, including the European Commission and the International Monetary Fund, have acknowledged that the plan provides the correct basis for supporting economic recovery;

recognises that the measures outlined in the plan will support the achievement of the targets in the Government’s integrated trade, tourism and investment strategy, Trading and Investing in a Smart Economy, including the target to create 300,000 new jobs;

and commends the National Recovery Plan as a pragmatic and achievable road map for a return to sustainable growth in the Irish economy.”.

I join others in welcoming the Minister of State, Deputy Kelleher, to the House. I thank the Labour Party for making Private Members’ time available to enable us discuss issues in regard to job creation and employment. I will begin by way of rebuttal to comments made by Senator Bacik. It is not we who do not wish to talk about some of the many positives that have been achieved from time to time or some of the many initiatives that have been taken by the Government throughout the various Departments related to work activation and encouraging employment, notwithstanding these tremendous difficult times. As an Irish citizen rather than a Fianna Fáil Member of the House, I would welcome if people were somewhat more responsible in their commentary. While it is certainly legitimate in this day and age to play the ball and it may even be legitimate to play the man, when one hears Deputy Burton at the weekend describing the country as banjaxed, one wonders why she has to take a pickaxe to the pitch altogether.

Senator Ivana Bacik: Information on Ivana Bacik Zoom on Ivana Bacik That is what everyone is calling it.

An Cathaoirleach: Information on Pat Moylan Zoom on Pat Moylan No interruptions, please. No one interrupted the Senator during her contribution.

Senator Marc MacSharry: Information on Marc MacSharry Zoom on Marc MacSharry Equally, one wonders why on Sunday we had to listen to Deputy Rabbitte pontificate about a huge derivatives problem in the banks which we have not heard a word about since but which would only serve to scare the living daylights out of anyone who was listening to “This Week” on Sunday.

Senator Ivana Bacik: Information on Ivana Bacik Zoom on Ivana Bacik Is the Senator accusing us of talking down the economy? His party has done a very good job of bringing down this economy.

An Cathaoirleach: Information on Pat Moylan Zoom on Pat Moylan No interruptions, please.

Senator Marc MacSharry: Information on Marc MacSharry Zoom on Marc MacSharry It is a legitimate point to make. While it is perfectly legitimate to play the ball and criticise the Minister of the day for the policy that is to be implemented, in this environment one must not deny the resilience of this great nation, its people and their ability to overcome the challenges that have been presented to them. It is worth noting that in the depths of this serious crisis, namely, the substantial borrowings that will have to be taken to meet the shortfall between what we are spending and what we are taking in, the debt to [42]GDP ratio in 1987 was in the region of 125% and even now, following a full drawdown of the facility being made available by the IMF, it would still be in the region of 102%.

The current unemployment level is disgraceful and is far too high at 13.8%, but as late as 1993 it was as high as 18%. That is not to excuse any mistakes made in the past — far from it — but we have been in difficult positions before and we have risen to the challenge. The Taoiseach announced he will seek a dissolution of the Dáil shortly after the legislative process which follows the budget has been completed. People will have the opportunity to argue the points and performances of the past. That will happen soon enough.

Many things in terms of work activation have taken place recently. There are many positives of which I would like to remind us. For example, from July of last year to July of this year, the value of exports were up 12%. In the first half of the year, service exports were 8% higher than in the corresponding period in 2009. Our trade surplus is up 29% to €4 billion. Enterprise Ireland states that its companies will recover approximately 70% of the export earnings lost last year. IDA Ireland won 75 investment projects in the past 12 months which is more than one announcement per week.

That is not what the people are treated to on Sundays. They are told this country is banjaxed. The Opposition should play the issue, play the ball and even play the man, but it should not dig up the pitch because it might end up in government.

Probably the most challenging year for the global economy and not just for the Irish one was 2009. If one was to believe the Opposition’s charges, our reach seems to be phenomenal when one considers our impact on all the other economies of the world.

Since 2009 the Government’s policies and investments have enabled IDA Ireland companies to create 4,500 new jobs and increase exports to €110 billion. We have seen a drop in the unemployment figure in recent months which suggests a stabilisation of the situation. The Government’s policies and investments will enable Enterprise Ireland companies to create 7,000 new jobs and win new export sales worth approximately €750 million. Internationally, foreign direct investment was down 30% but in Ireland it fell by only 4%. Internationally, exports fell by more than 20% but in Ireland they fell by less than 3% and service exports actually grew by 2%.

The Government announced the plan, Trading and Investing in a Smart Economy, which sets a number of ambitious targets to be achieved by 2015. It will increase the number of new export-focused jobs by more than 150,000 with a similar number of indirect jobs also being created. It will increase the value of exports by indigenous companies by a further 33%, diversify the destination of indigenous exports, increase overseas visitors by 8 million and secure an additional 780 inward investment projects through IDA Ireland. This plan will also help farmers and firms expand their market share overseas and will boost food exports. It worth noting that Ireland remains the largest exporter of beef in the world, supplying food for 30 million people throughout the European Union.

The employer job PRSI incentive scheme will support job creation and counter the drift of people into long-term unemployment and welfare dependency. A new fund for job expansion has been launched by Enterprise Ireland which will provide up to €150,000 to eligible clients with a development plan which will increase employment. We have put €500 million into an innovation fund to support Irish and international entrepreneurs based in Ireland and we are increasing funding for seed and venture capital to support companies in order that they can grow and create jobs, although certainly more can be done in this area.

Although it is not intended, as I have said previously, I would like €2 billion of the IMF funding to be made available to the small and medium-sized enterprise sector by way of the [43]State taking equity in those companies. That could be done quite quickly, perhaps by using Enterprise Ireland. Someone good at auditing and someone good in the legal end of things could assess what applications should be successful. Some €2 billion would give a significant and much needed stimulus to that sector. This could complement IDA Ireland, Enterprise Ireland and all the other positive things happening. That is as far as I would go in terms of the Labour Party’s motion and the bank it proposes to establish. The State taking equity in the small and medium-sized enterprise sector would be innovative, get money into the sector and create jobs in the sector very quickly.

More than 1,000 small Irish firms have benefited from the innovation voucher scheme which allows them to link up with college researchers. This is welcome and helps to solve business and technical problems. We have put in place a €300 million investment programme in our higher education institutions to provide state-of-the-art research facilities.

It is very important that we have maintained our 12.5% rate of corporation tax. We are faced with tremendous challenges. In ordinary circumstances, no one would set out to have to contemplate the kinds of measures we will see in the budget next week and which are in the four year plan. As a nation, we are resilient enough to meet those challenges regardless of who is in government. I believe in the people and in their resilience to meet those challenges.

People will know I do not heckle in the House and I am not someone who gets involved in cheap blows, but as an Irish citizen, I yearn for the body politic to dispense with the political games. By all means play the man and, if necessary, play the ball and the man but the Opposition should not dig up the pitch in the interests of winning an election in which it clearly will do better.

Senator Liam Twomey: Information on Liam Twomey Zoom on Liam Twomey I am a little surprised by Senator MacSharry’s last comment. He might have completely missed the fact the IMF was here and is telling us what to do. We have already dug up that pitch.

Senator Ivana Bacik: Information on Ivana Bacik Zoom on Ivana Bacik Hear, hear.

Senator Liam Twomey: Information on Liam Twomey Zoom on Liam Twomey We have ploughed up the pitch. The only way any plan for the future will work is if we can improve growth, create jobs and increase competitiveness across all sectors of the economy. The IMF has acknowledged that great work is being done by the private sector and some sections of the public sector to improve competitiveness and the ability to grow in the future which, in turn, will lead to more jobs. Fine Gael’s political plans are set out in the NewERA and Reinventing Government documents which focused on creating jobs and competitiveness and on transparency and accountability in all sections of society because that is what will make the difference.

Our Fianna Fáil colleagues should acknowledge that after a decade of economic stupidity on their part, it is time to return to that old mantra: “It’s the economy, stupid.” I do not believe they should be critical of Deputy Rabbitte or Deputy Burton in regard to comments they may have made in the media because, regrettably, their comments cannot do any harm. We are now tied to the IMF. The terms of the IMF funding are quite stringent and will have a huge impact on what will happen in this country over the next couple of years.

If anything, the Minister of State, Deputy Kelleher, should acknowledge the incredible stupidity of Ministers saying repeatedly that we had enough money until next June. What was the Government going to do after next June? The reason Ministers kept saying we had enough money until next June was that they did not intend being in government after next June and did not care what happened to the country. That puts them in the position of putting this [44]country’s sovereignty at risk and of making matters worse. There is no acknowledgement of that.

The arrogant way this Administration treated the people is the reason it will get a hammering at the next general election. It has no regard for the views of the people and where they find themselves. In the process of trying to save their own skins, Ministers have robbed every State piggy bank on which they could get their hands. The PRSI fund, which had €3.5 billion in it a few years ago, is now practically dry. They have used the National Pensions Reserve Fund as part of the bailout. They have squandered any taxpayers’ money on which they could get their hands or any funds which have been built up over the years to save their own sorry hides. That is a concern of people.

  6 o’clock

Members of the Government parties should not talk as if this issue is limited to what is going on. The biggest crisis facing a large number of Irish people is personal debt, not the Fianna Fáil-IMF bailout fund. Figures show personal debt is very large and has increased over recent years. They give the Minister of State an idea of the previous and current positions. The following figures describe household debt versus disposable income. In 1995 in Ireland, for every €10,000 earned people owed €4,800. By 2008, for every €10,000 earned, people were €17,600 in debt. That is the biggest increase in debt in the world I have come across. The UK also has a serious problem with personal debt, and for every €10,000 earned there people were in debt to approximately €10,600 but that has increased to close to our figure of €17,300. In France, for every €10,000 earned in 1995, people there owed €6,600 and in 2008, for every €10,000 earned they were €7,200 in debt. Spain has been thrown into a position similar to ours. In 1995, for every €10,000 earned there people had €5,900 of debt and that figure has gone to €13,000, which is still substantially less than our
figure.

This is a major concern because the number of distressed mortgages has also increased dramatically over 12 months. The value of those distressed mortgages is approximately €8 billion. If people continue to lose their jobs or see a cut in their disposable income, it will hinder the ability to repay all these types of personal debts. Mortgages form the biggest personal debt but there are other types which take up a massive percentage of disposable income. If for any reason people are unable to make repayments and lose their houses, ending up with massive debt and court cases awarding judgment against them, there is a significant consequential effect. The Government should take this into account as much research has shown that people suffering indebtedness, especially debt they cannot repay, are prone to economic and medical effects on their lives. There is also a serious concern about what is known as a benefit trap, with people who cannot make repayments or who lose their homes ending up dependent on social welfare. As long as they are on social welfare, they can feel a certain comfort and often such people find it even more difficult to get back to work or self-employment to get out of the mess. We could be entering a vicious cycle if we do not take control of these issues and the Government could end up, especially in the upcoming budget, taxing people into such a position.

Who are the people most at risk from inflation? Inflation has edged up slightly over recent months and those vulnerable to an increase include people with high energy usage — water, gas and electricity — and mortgages. These are young families and this should be taken into account or generations of people will feel the effects of what is happening now. The consequences will affect parents, children and significant numbers of people in society.

Over the course of the next few weeks we will discuss the budget and other economic policies. The Minister of State should bear in mind that when the Government presents the budget, he should be careful to ensure it does not damage the economy any more than it has been damaged [45]up to now. Young people and families should be protected from the changes that will come from the budget. Above all, the Government must acknowledge its responsibility in creating what is an unbelievable crisis in the economy.

Minister of State at the Department of Enterprise, Trade and Innovation (Deputy Billy Kelleher): Information on Billy Kelleher Zoom on Billy Kelleher I welcome the opportunity to speak on the national recovery plan as a strategy for economic recovery with the aim of restoring stability to the public finances, improving Ireland’s competitiveness and stimulating enterprise growth and job creation. The Government published the four year budgetary plan last week mapping out Ireland’s return to economic stability. The National Recovery Plan 2011-2014 is described as a blueprint for a return to sustainable growth in our economy. It was unveiled by the Government with the aim of restoring confidence, creating jobs and driving economic growth. I am pleased to be in the Seanad to outline how the plan gives citizens and businesses as well as international observers a clear sense of the economic and budgetary conditions that will apply over the next four years as we emerge from our economic difficulties and banking crisis.

The plan sets out specific actions to spur further improvements in competitiveness across all sectors of the economy, including measures to cut costs in energy, waste, transport, professional fees, property and labour. It commits to maintaining the 12.5% corporation tax rate, which this Government continues to reiterate as a key component of our industrial policy. On taxation, new measures are balanced in a way that is least harmful to enterprise while at the same time generating the required Exchequer revenue. The Government has maximised support and protection for enterprise and jobs as these are key to economic growth and recovery.

The need for the plan is abundantly clear. The Government will spend €18.5 billion more this year than it will receive in taxes and that gap must be closed. It is unsustainable that Ireland would continue to borrow €2 for every €5 it spends. Implementation of the plan will reduce Ireland’s deficit to 3% of gross domestic product, GDP, by the end of 2014, and the achievement of that goal is critical for the proper functioning of the economy in the eurozone. The priority, however, is to ensure the public finances are stabilised in order that we can support enterprises to grow and create jobs. It is clear the best way to support businesses and create jobs is to fix the banks, address the deficit in our public finances and improve our national competitiveness. These actions are not aimed at firms of any particular size or sector but the overall economy. They are aimed at improving the overall business environment in this country in order that all firms can survive and grow.

According to the Central Statistics Office, the productivity of the Irish workforce was a third higher than the EU average in 2009 as measured by GDP per person employed. We have seen reductions in costs as measured by the harmonised index of consumer prices, HICP, compared with our EU neighbours. Our average hourly labour costs fell by 3.2% in the second quarter of 2010 compared with the second quarter of 2009, while average OECD and euro area labour costs continue to grow.

There are areas where the Government acknowledges a need to take further action to restore Ireland’s international competitiveness. The National Competitiveness Council’s annual competitiveness challenge was published today but its analysis fed into the consideration of the four year plan. As the NCC and others have recognised, we have made progress over the past two years but more needs to be done in terms of reducing costs and improving productivity in all sectors. The recovery plan has a range of measures aimed at tackling some of those areas over which we have some control that will reap rewards in terms of our international competitiveness.

The Government does not create jobs. The job of the Government is to support the private sector by removing structural impediments to competitiveness and employment creation as well [46]as securing conditions for growth. There are actions which will be taken to cut costs for businesses but also to remove other obstacles for enterprise as well as measures to improve cash flow.

As mentioned by some Senators, energy costs are significant for businesses in Ireland. Figures released by EUROSTAT yesterday show that in the year to the end of June 2010, there have been significant reductions in Ireland’s electricity and gas prices. Electricity prices for medium to large businesses fell by 20% to 36%, which is the largest drop in the EU and compares with an EU average of a 4% reduction. Gas prices for all enterprises were between 11% and 18% below the EU average.

The plan will continue to focus on rigorous efficiency targets for the State energy companies as well as implementation of the national energy efficiency action plan to achieve national energy savings of 20% by 2020. From 2012 to 2014, our semi-State bodies will invest almost €8 billion in sustainable energy, including renewable energy and the development of smart grids, a flexible grid that can incorporate renewable energy on our system and allow for a two-way flow of electricity. The €600 million east-west interconnector will be built by 2012 and this will mean we can export our clean green power to the United Kingdom and beyond.

Access to broadband is key for Irish industry to compete globally as well as nationally. Our broadband penetration has trebled over the past three years and our speeds have doubled. The recent Cisco Oxford survey places Ireland 13th in the world for broadband leadership. Commercial investment in broadband is supported by the Government’s national broadband scheme launched by the Department of Communications, Energy and Natural Resources and operated by 3, a telecommunications company. The objective of the scheme is to deliver broadband to certain targeted areas in Ireland in which broadband services were deemed to be insufficient, and this was completed in October 2010.

The next generation broadband task force comprises industry, Government and ComReg representatives and is aimed at ensuring the development of next generation broadband infrastructure will meet the demands of Ireland’s smart economy. The task force will meet in December to consider how best to maximise the impact of the investment in broadband infrastructure. Potential for collaborative approaches to investment will be considered in line with the European Commission communication published in September permitting such an approach. The overall objective of the task force is to foster a dialogue and follow-up actions which will promote the advancement of next generation broadband.

Costs in sheltered sectors will be tackled. The Government will receive regular reports from an independent figure who will oversee the promotion of competition in the professions. A package of measures will be implemented to reduce legal costs, including the introduction and enactment of the Legal Costs Bill.

Although commercial property costs have fallen, there is scope for further improvement in this area. While upward only rent reviews have been banned since February this year, the working group on transparency in commercial rent reviews made further recommendations in July to improve the rent review process for tenants and landlords. The plan commits to the implementation of the recommendations. It also includes actions to be taken on the rental of property by the State for its own purposes, as well as investigating the potential for providing access to vacant or under-utilised public property for entrepreneurs or business start-ups to use as incubation centres.

A key element of improving our competitiveness to reposition Ireland as an internationally competitive location for doing business is tackling our labour costs. We have already seen the process of adjustment in labour costs, with a 6.75% improvement in 2009 vis-à-vis the euro [47]area. The State must also ensure people choose work over welfare. The national minimum wage is currently the second highest in the European Union and the Government’s proposal to reduce it by €1 per hour will remove a barrier to job creation. It is essential to strike the right balance between the national minimum wage, labour legislation, social welfare rates, taxation and activation of the labour market to avoid disincentives to return to work. The reduction in the amount of the national minimum wage will be implemented in conjunction with reform of the welfare system designed to reduce unemployment traps.

The Government’s four year plan provides significant funding for enterprise agencies, namely, IDA Ireland, Enterprise Ireland and Science Foundation Ireland, which will underpin their work of job creation and the research agenda. This is in line with the principles set out in the Government’s infrastructure investment priorities report of July last. The capital investment in the agencies will drive recovery in the domestic economy as it will allow Ireland to continue to win foreign direct investment, grow indigenous exports and create high quality sustainable jobs in the smart economy.

The plan underpins the work of the job creation and research agencies, IDA Ireland, Enterprise Ireland and Science Foundation Ireland, by providing funding that will allow them to meet their targets. The capital investment in the agencies will allow us to continue to win foreign direct investment and grow indigenous exports. In this context, it is important to acknowledge, as previous speakers have done, that Ireland continues to regularly win foreign direct investment. Accenture, for example, has announced today that it will create 100 jobs. We are moving up the value chain in the types of foreign company which consider Ireland as a location for investment, especially in research and development and innovation. This is a critical factor which must be highlighted as a positive aspect of the economy.

The capital funding to be provided for the enterprise agencies carries with it challenging job creation and economic targets which are a key aspect of the economic recovery plan. The enterprise sector has a fundamental role to play in revitalising the economy. Accordingly, the enterprise agencies have been provided with funding to support this effort. Additional funding will be provided for Enterprise Ireland to support the research and innovation effort in Irish enterprise. This will enable the organisation to continue to support companies to undertake collaborative research projects and realise their potential.

While high levels of entrepreneurial activity have always been important to economic prosperity, in the current economic climate the survival, growth and development of small businesses are central to full economic recovery. The capital allocation for the county enterprise boards in 2010 is almost €15 million, a figure which has been supplemented by an additional €3.3 million sourced from savings elsewhere in the Department, bringing the total to more than €18 million.

A guiding principle of the expenditure adjustments set out in the four year plan is that future capital investment must be targeted and employment focused. Public capital investment will have its greatest impact in maintaining sufficient capacity in the economy and supporting productivity enhancements. The programmes supported by my Department and its agencies will be critical in achieving a return to economic growth. Future policy will focus heavily on commercialisation of research outputs. Capital investment will, therefore, support direct job creation in world class, export oriented enterprises. There will also be a level of direct job creation during the delivery phase of valuable public infrastructure. The national retrofit programme, in particular, will give rise to a considerable level of jobs in the construction sector nationwide, while the intended introduction of water charges by 2014 will require a nationwide project to install meters in domestic residences.

[48]Foreign direct investment will continue to be a catalyst for national prosperity. Foreign owned companies create hundreds of thousands of high quality jobs, both for the employees of the investing company and in the firms which provide goods and services for them. The continued attraction of sustainable foreign direct investment is critical to ensuring Ireland’s economic recovery. Foreign owned companies produce more than 70% of all goods and services exported and spend more than €19 billion in the economy, including more than €7 billion on payroll each year. International investment will continue to be a key driver of employment, exports and growth.

Ireland’s value proposition to multinationals is also strongly based on what I refer to as the four Ts — track record, talent, technology and tax regime. Our reputation for excellence in all of these areas continues to attract a strong flow of companies to the country. Foreign direct investment has returned to levels not seen since 2005-06 and the IDA has won 76 investments so far this year which will create more than 6,000 jobs. Of these investments, 22 are by companies new to Ireland. As I noted, Accenture which is backed by the IDA announced this morning that it would create 100 high value jobs, the focus of which will be the company’s new research and innovation centre, its first dedicated centre globally.

Enterprise Ireland recognises that future sustainable economic growth will be based on a thriving Irish export sector characterised by innovative companies. Exports are critical both to maintaining current jobs and driving future job creation. There have been two calls under the employment subsidy scheme and 1,632 approvals have been made, valued at more than €130 million towards 14,902 subsidies. The companies in question have committed to maintain more than 100,000 jobs, of which 88,000 are full-time and 13,000 are part-time, to 30 November.

Enterprise Ireland remains focused on ensuring companies throughout Ireland survive the recession and are positioned to seize the export opportunities the tentative recovery in major economies will present. There has been a good recovery in export markets for indigenous Irish companies thus far this year and it is expected this positive trend will continue, with the prospects for job creation improving as a result. Enterprise Ireland also emphasises the role public procurement plays in economic recovery and development and supports small and medium-sized firms to tender for the supply of goods, services and works to the public sector.

One of the key messages in the Government’s national recovery plan is that export-led growth will fuel domestic recovery. It recognises that the implementation of the strategy and action plan set out in the document, Trading and Investing in a Smart Economy, will ensure our trade, tourism and investment sectors will be well positioned to respond effectively to emerging opportunities as the global economy recovers. Trading and Investing in a Smart Economy is an integrated strategy that is global in scope and covers both existing and new high growth potential markets. The strategy provides a framework to maximise the potential for increased exports, tourism and investment that can support well paying jobs. It has set a number of ambitious targets to be achieved by 2015, for instance, the creation of 150,000 direct new jobs in manufacturing, tourism and traded services. This figure is based on agency estimates of their growth targets over the strategy period to the end of 2015.

The new strategy also foresees the creation of a similar number of new indirect jobs. This latter figure takes into account the differing impacts of new jobs in manufacturing and services, based on the numbers of projects, job intensity, purchase of raw materials and services, the re-spending of salaries and the impact of taxation.

Our export performance in recent years has shown considerable resilience. CSO data show that, overall, our total exports in the first half of this year were up almost 3% when compared with the same period last year. In particular, our services exports are performing very well, [49]with the value of such exports having increased by 8% during the period in question. Data for our merchandise exports in July, August and September have also shown strong growth which augurs well for a final year outturn. I firmly believe Ireland’s recovery will be export-led, necessarily and essentially.

Through its underpinning of the work of the relevant State agencies, by providing the funding to allow them to meet their targets, the national recovery plan fully supports the implementation of the new trade strategy. Likewise, the capital investment in the agencies will allow us to continue to win foreign direct investment, grow indigenous exports, increase the number of tourists and create high quality sustainable jobs in the smart economy. With the plan, Trading and Investing in a Smart Economy,we are positioning Ireland to be successful in selling our goods and services abroad, while winning global investment and attracting visitors from around the world. The strategy will help Irish exporters to expand their market share overseas, including in food exports. Export-led growth is the right strategy to follow. Supporting export-led growth is, therefore, of critical importance for the recovery of the country. I am confident that the four year recovery plan fully supports the achievement of the ambitious targets set out in the recently published document, Trading and Investing in a Smart Economy.

Investment in research, development and innovation plays a significant role in building Ireland’s smart economy. Research, development and innovation investments not only embed existing operations and employment but also pave the way for future investment and job creation. The Government is committed to the overall development of the smart economy. We are firmly of the view that innovation can help to accelerate our economic recovery and get us back on the path to sustainable growth. The Government strategy being implemented comprehends research and the application and commercialisation of its fruits. Research, development and innovation investments in IDA-supported companies have been steadily growing and in 2009 amounted to over €500 million, with investments in a wide range of sectors. Research, development and innovation investments in IDA-supported companies in 2009 represented 49% of all the investments in that year. In the years to 2014 the goal will be to increase the number of firms undertaking meaningful or significant research, development and innovation projects.

It is recognised that the generation of new companies from the outputs of research offers a potential source of future jobs and revenue. Enterprise Ireland will devote a significant effort to developing new start-up companies with high performance potential. The funding to be provided for Science Foundation Ireland will enable the agency to stabilise the number of researchers and research teams. This is critical to ensure Ireland will retain the excellent science base we have built in the past decade. It also supports indigenous companies which are reliant on knowledge for growth and job creation and will strengthen research and industry collaborations. Since 2007 researchers from Irish companies and higher education institutions have won funding totalling €269 million for research projects in areas such as ICT, health, nano-technology and energy. Small and medium enterprises account for 74% of the funding to private industry. This funding enables Irish SMEs to collaborate with world class research teams across Europe. The Irish success rate of applications is 24.04%, well above the European member state average of 22.47%. The new ideas and innovations generated from these research collaborations will help to create new high quality jobs.

Enterprise Ireland is focused on maximising the return from the State’s investment in research and development. This includes the spin-out of innovative companies from research clusters, the transfer of technology to existing companies, including within the multinational base in Ireland, and supporting collaboration among companies based in Ireland and the research institutions which can work on projects of commercial application.

[50]There is also a strong effort on the part of Enterprise Ireland, working with universities and institutes, to collaborate with overseas colleges in research and development. This effort should be promoted in the trading and investment strategy published some months ago. We should concentrate on promoting Ireland, not only as a centre of learning and a centre for research and development but also in building strong collaborative links with universities and research institutes throughout the world. This area offers enormous potential. In my time as Minister of State with responsibility for trade and commerce we put a great deal of effort into trying to bring Irish universities and institutes together and then went abroad to sell Ireland Inc. as a place in which collaborative work could be done in the areas of research, development and innovation.

With the capacities we have and the high quality and critical mass of research undertaken in Ireland during the past ten years or thereabouts and by working with the multinationals, the commercial world and outside research bodies, Ireland can really benefit in the years to come. I will encourage whoever will sit in the ministerial seat in Kildare Street to promote actively the idea of Ireland being an education hub and, more important for longer term strategies, build on these collaborative links. They may be tenuous, but they are being established on a continuing basis. I am sure that with support from the Government and everybody else concerned they will bear great fruit in years to come. One can already see this in the context of UCC and the Cancer Research Centre which engage in a very strong collaboration with an outside agency in the United States. That collaboration is underpinned by work done on both sides of the Atlantic and mirror-imaged across all sectors of the economy. It is seen in the clusters of medical device manufacturing companies in Galway which work with similar clusters in Massachusetts and elsewhere. There is enormous potential in that strong collaborative approach.

In addition to mapping out how we are to put the public finances on a stable footing, the four year national recovery plan is also a blueprint for economic growth, driven by export performance and based on having a more competitive economy. A competitive corporation tax rate, labour tax wedge and marginal tax rate are critically important determinants of our attractiveness for foreign direct investment, labour market participation and overall competitiveness. The plan recognises this fact and lays out proposals for taxation, accordingly, maintaining an overall competitive tax regime. One of the strengths of the plan is that it sets out a figure of €5 billion in tax and revenue raising measures but does so in a way that is least harmful to the enterprise sector. Any person who reads the published National Recovery Plan 2011-2014 will see that we are trying to ensure we will not make Ireland less competitive, and that we do not place taxes in areas that would create blockages for entrepreneurs or investment in job creation measures.

For that reason, whatever the outcome of a general election or discussions that may be held about this document, when people go on the hustings, we should have a fair debate on the content of the plan and what it tries to achieve. If any person opposes the plan, he or she must be honest and declare how he or she will find funds in the years ahead. I have listened to the contributions made by Senators. Although tax increases are proposed in the plan, it is obvious that if parties of a different political hue were in government, further increases would be necessary to fund their proposals. This is something that should be explored consciously and discussed in an open and honest manner. First, there will be no change to the 12.5% rate of corporation tax. As clearly stated in the plan, while taxation has to play a part in restoring balance to the public finances, this will not apply to our corporation tax rate. A low rate of corporation tax on export oriented activity has been a cornerstone of our industrial policy since the 1950s and the 12.5% rate is now part of our international “brand”. The contribution from [51]the corporate sector will be made through the maintenance and creation of high value employment.

I again welcome the strong support across all sides of the Houses in recent times for the corporation tax rate although kites were flown at times. A Fine Gael motion was tabled in the Dáil on the matter and it received all-party support. It is critically important to send the very strong message that Ireland retains sovereignty in its taxation affairs and that, in the context of corporation tax, the only people who can change the rate are those who are democratically elected to the Houses of the Oireachtas. It will remain within the competency of the national Government. This should be said on every significant occasion. When Senators make their contributions inside or outside the House, they should continue to emphasise this fact because sometimes ears may be closed to the truth.

The plan will ensure we will retain a competitive labour tax wedge. Income taxes drive a wedge between the cost of hiring someone and the actual take home pay of that individual. Increasing the tax wedge increases the cost of labour, replacement rates and stimulates a move towards the informal economy. Under the plan, it will be necessary to broaden the tax base by increasing the overall tax burden on average earnings for a single person from 29% in 2009 to 34% by 2014. Ireland will, however, maintain a competitive tax wedge, being the second lowest tax of the EU members of the OECD. Although tax increases are included in the national plan, it is critically important to point out that Ireland will not be a high tax economy when it comes to employment.

The marginal tax rate — the amount in tax paid on the last euro of earned income — is also a competitiveness issue. Research shows that very high marginal rates increase the average rates paid in tax by high skilled workers and create a brain drain, resulting in a lowering of innovative activity and productivity. It is important, therefore, that the taxation measures included in the plan do not lead to an increased marginal rate. I welcome the clear statement that over the 2010 to 2014 period of the plan the top marginal rates will remain unchanged.

I refer to the banks and the provision of credit to viable enterprises. Central to this has been the repair of our banks which are the key facilitator of business transactions in the economy on a daily basis. Specifically, the provision of credit to our enterprise sector, especially SMEs, should primarily come from a properly functioning banking sector. The code of conduct on lending to small businesses, the bank guarantee scheme, the recapitalisation scheme, the nationalisation of Anglo Irish Bank and the establishment of the National Asset Management Agency have all contributed to the stabilisation of the banking sector with a view to facilitating the flow of credit. In this regard, the House will be aware that the Government secured a commitment from the main lenders, AIB and Bank of Ireland, to make available not less than €12 billion in total for new or increased credit facilities to SMEs over 2010 and 2011, including funds for working capital.

The Minister for Enterprise, Trade and Innovation, Deputy Batt O’Keeffe, and the Minister for Finance, Deputy Brian Lenihan, have both made it a priority to meet the banks regularly to discuss the availability of bank credit for businesses, especially SMEs. They have reminded the banks of their obligations under the recapitalisation package and of the huge investment of taxpayers’ money into the banks aimed at getting the economy moving again. The Government has arranged that AIB and Bank of Ireland will make available not less than €3 billion each for targeted lending for new or increased credit facilities to SMEs, farmers and sole traders in both 2010 and 2011. Specialised funds for seed and venture capital and for environmental lending are also in place. Banks are working with Enterprise Ireland to provide better financing for high-tech companies and exporters.

[52]Each bank’s performance in regard to its €3 billion lending plans is reported regularly, including sectoral and regional breakdowns. The Credit Review Office, headed by Mr. John Trethowan, is monitoring the banks and assessing their policies. His work is having a positive and meaningful impact on this aspect of banking at present. As noted by Senators earlier, in his second quarterly report published on Thursday, 18 November, Mr. Trethowan indicated he had analysed 19 applications for loans to small firms and told the country’s two main banks that credit should have been given in the case of five of them. In other words, he overturned five refusals. The report also showed that the two banks covered under the Government’s recapitalisation plan, Allied Irish Banks and Bank of Ireland, have, through their respective appeals mechanisms, processed 114 internal reviews of decisions on loan applications. Of these, 86 were upheld, 20 were reversed and eight are still being reviewed. In his report, Mr. Trethowan stated: “Current market perceptions that banks are not lending to SMEs is based on experiences from six to nine months ago, and the current situation whilst still not entirely perfect, is now continually improving.” This development will no doubt be welcomed by all sides of the House as the issue of funding to SMEs, working capital and cash flow was continually raised by all during any debate on the economy, job creation or SMEs.

As I mentioned in this House last month in the course of an Adjournment debate, all Departments are now required to pay their business suppliers within 15 days of receipt of a valid invoice. This directly impacts on the cash flow of SMEs. One of the commitments under the National Recovery Plan 2011-2014, published on 24 November 2010, is that the 15 day prompt payment rule will be extended beyond Departments to the wider public sector. My Department is working on how this arrangement can be put in place in practice, including in regard to reporting requirements by State agencies. My officials will consult other Departments and State agencies on the matter shortly.

A second commitment under the National Recovery Plan 2011-2014 of interest to SMEs is the decision by the Government to review the business expansion scheme. The scheme has been operating for 26 years but funds raised under it since 2008 have declined significantly and businesses have complained that the scheme is administratively too complex. For these reasons, the Government has decided, subject to European Commission approval, to transform the old scheme into a new and better focused business investments targeting employment scheme, BITES. The Government has taken targeted action to ensure credit is available to viable businesses without imposing burdens on the taxpayer.

We are providing the necessary certainty and confidence for the international markets and for Irish citizens that we can restore order to the public finances, reach our budget deficit target of 3% of gross domestic product by 2014 and stimulate economic recovery by investing in enterprise and jobs. I am pleased to see there has been favourable international comment on the plan. The European Commissioner for Economic and Monetary Affairs has welcomed the plan, stating “it is an important contribution to the stabilisation of Irish public finances”. He also noted it “strikes a good balance of durable expenditure and revenue measures, with due regard to protecting the least well off”.

The national recovery plan is also supported by the agreement reached over the weekend on a funding package of €85 billion from member states of the European Union through the European financial stability fund and the European financial stability mechanism, bilateral loans from the UK, Sweden and Denmark, and the International Monetary Fund’s extended fund facility on the basis of specified conditions. This includes a contribution from the State of €17.5 billion which will come from the National Pensions Reserve Fund and other domestic cash resources. The details of the programme closely reflect the key objectives set out in the national recovery plan.

[53]Much of the commentary is fair in the context of the political charges that can be made against the Government for what was done and how we got here. It is important, however, to keep matters in perspective and not rewrite history. I take no joy in standing here. As I have said in the House on numerous occasions, I have more at stake in this country turning the corner, becoming prosperous and giving opportunities to our young people as a father of three young people than I ever will have as a Minister of State or as a Fianna Fáil Deputy or candidate. I have been abroad on numerous occasions promoting Ireland as a place for foreign direct investment and promoting Irish companies in export markets throughout the world. While some may not believe it, I know that commentary in these Houses is taken seriously and has an impact on how people abroad view us. I genuinely and passionately believe this is of huge significance. We can decide how we fight the next election but commentary and loose tongues will undermine confidence in this nation.

While I am not suggesting we should have shirked our responsibilities, the Government has spent the past two years fighting for the country’s basic identity and economic survival and for the survival of the institutions that fund our small and medium businesses. We can argue about how we got here and about the mechanisms we have used to ensure we still have a country and a banking system that are at least basically functioning, surviving or on life support. There is continual use of the scorched earth policy, however, which is normally used by the retreating army, not the advancing army. We have a situation where much of the commentary coming from some parts of the House is almost in the vain hope that the whole thing will fall over and they will then march over the scorched ground and picked up the burnt-out carcass of what remains. I say this as one who may not have an opportunity to speak in the House again because of the dissolution which will happen some time early in 2011. I urge Members, when debating, to be conscious that there is a broader audience.

I could deal with the political points that were made in the context of the funding of the banks and whether we should have nationalised them or let them fail. Any objective analysis would point out that the Government’s first and foremost duty is to try to ensure we have a State that functions, that can pay its way in the world and, more importantly, can pay its citizens in the form of social welfare payments and pay to teachers, nurses, doctors and gardaí, as well as pay for the services any modern state would consider normal.

With regard to the IMF-EU package, we will be paying an average interest rate of 5.8% if we draw down the facility. As we speak, Irish bonds are being traded at over 9% on the second-hand bond market. The Government could have been cute and decided, as it would not be in office in June 2011, to let matters drift. No responsible Government could pass a budget for 2011 knowing there was not enough funding to meet even the basic commitments of that budget. At least whoever is in government will know they had access to guaranteed funds subject to conditions on the basis of which any Government could decide upon its priorities. There are parameters laid out that people will have to live within to gain access to the funding. If they do not want to gain access to that funding and live according to the parameters laid out in the national recovery plan and agreement with the European Union and IMF, they can tear up the plan. In that case, they will have to gain access to funding somewhere else. I am not an expert economist but realise that the bottom line is that we, as a sovereign people and Government, have a responsibility to ensure we have funding mechanisms available to us.

The talk of a sell-out of sovereignty is alarmist in the extreme. Let us be quite clear about this and ask whether we are beholden to the IMF and the European Union or to bond markets. Either way, we must borrow money somewhere. I would prefer to be borrowing it from people with a genuine interest in seeing this country survive, grow and prosper. There is collegiality among those within the European Union and, more important, the eurozone at present. Today’s market conditions demonstrate a re-focusing of efforts to undermine Portugal, Spain, [54]Italy, Belgium and the whole eurozone. This country has invested enormous sums emotionally in the European concept. For us to suggest now that we could have defaulted and that we should tear up the old bonds and throw them on a bonfire is inappropriate. We are very dependent on the stability of the eurozone and on a functioning political European Union. It has been our friend and will continue to be our friend but we have a duty to play our part in ensuring there will not be an unravelling of a project that most in this country believe is good and from which they have benefited.

Senator David Norris: Information on David P.B. Norris Zoom on David P.B. Norris I welcome the Minister of State, Deputy Kelleher, to the House, with which he is very familiar. I do not propose to score partisan political points, but that does not mean I will not have some criticisms to make. If the Minister of State’s speech was his last in the House, he should note it was a fine one, although I did not agree with some of it. It was very clear that he spoke from the heart, particularly when he invoked the future of his family. Few of us in the House could remain unmoved by the genuine sentiments he expressed. However, I support the motion. I had not anticipated speaking at this point, but I am happy to do so.

The first point of the motion states Seanad Éireann “notes that the Government’s four year plan published on 24 November 2010 contains nothing by way of concrete measures to restore employment”. It does not contain very much and I am not saying this in a partisan way. The plan certainly does not appear to contain enough. I do not make this charge for the purpose of gaining political advantage in that this comment has been made by a number of financial experts. For that reason, it is worrying. It is a central point in the remarks made by Dr. Krugman who certainly does not share the Minister’s view on bondholders. He holds what appears to be a majority view which is shared by the directors of some of the largest bond-holding companies. All economists admit that what has happened here is unjust, immoral and indefensible on ethical grounds. I asked on the Order of Business whether it was possible to sustain an appropriate financial system, or a just and decent civil society, on grounds that were universally acknowledged as being immoral, unjust, unethical and, according to Dr. Krugman, a mistake. I agree with that point.

It is true the Government is feeling overwhelmed. Who would not? I certainly would feel under considerable pressure. I have a degree of sympathy with the Government members as human beings. All of us have seen repeated on a number of occasions in the past few days the extraordinary scanning shot of the Government Front Bench in the Dáil. Body language is very instructive. There is no doubt the Members shown were beaten people. One only had to look at the expressions on their faces to realise they were really concerned.

My Labour Party colleagues have called on the Government to establish a strategic investment bank to fund viable businesses. This is absolutely desirable and who could possibly disagree? However, from where will they get the money? I do not know. We have actually frittered away our resources. Therefore, this good idea is not sustainable. Like the Minister of State who was engaging in his frankness, I am not an economist.

I welcome some of the points made by the Minister of State. I did not have time to read his speech, but I was listening to it in my office. I am glad the issue of upward-only rent reviews has been addressed and is continually under review. I refer, in particular, to the working group on commercial rents. This is a vital issue. However, why is it taking so long to address it? I have been talking about it for years in this House. I highlighted what I had seen in our most fashionable streets. I walk up O’Connell Street and Grafton Street and through the Hibernian Way and could see what was happening. It was blindingly bloody obvious. It was insanity to have upward-only rent reviews. It was also insanity to increase our VAT rates when the British [55]did not. We share a land border with a part of the disunited kingdom which was lowering its rate when we were increasing ours. There was a certain amount of daftness in that regard. Let me welcome the provision to address this issue.

I welcome the scrutiny of legal costs, in respect of which there is a scandal. The most glaring example concerns the tribunals. Some members are commanding salaries of €2,500 per day, day after day. Let us have itemised accounts from lawyers. The Minister of State should get his colleagues to consider this. One simply never receives itemised accounts. One receives a bundled-up bill referring to stationery, postage, research, secretarial work and so forth. It is a load of nonsense and only one bald figure is listed. Since we are down to our last brass farthing, let the unfortunate people who have to pay legal bills know how much is spent on stamps, correspondence and secretarial time. I am not making any charges against individual legal practitioners because the practice to which I refer is followed throughout the profession. One never receives an itemised bill. I have never received one, although I am a very litigious man. I have never in my entire life received an itemised bill from any legal source. Let us address this issue.

The interest rate of 5.8% does not represent generosity. We have been good citizens of the European Union throughout our membership. We have taken very hard medicine and are being rewarded with punitive rates. The interest rate is an average figure; the actual figure for part of the loan will be considerably higher. No good deed goes unpunished. Let the people in Europe read this and realise there is at least one person here who recognises the lack of collegiality.

I was listening to a German Green Party member doing his damnedest to say Ireland should immediately scrap its corporation tax rate of 12.5%. How neighbourly is that? The journalist Polly Toynbee is not a Member of Parliament, but the language employed by her in her article in The Guardian, a very good newspaper, was a disgrace.

Senator John Paul Phelan: Information on John Paul Phelan Zoom on John Paul Phelan Hear, hear.

Senator David Norris: Information on David P.B. Norris Zoom on David P.B. Norris It was a racist caricature and she should be ashamed of herself for describing us as beggars, cheats, liars and thieves. Is that the language used by a good neighbour? In spite of its not being so, Ms Toynbee’s view is widely held underneath the soft parlance of the British Conservative Party.

With regard to Mr. Chopra, in one jump we seem to have gone from snip to chop. His emollient tones did not fool me one bit, including comments to the effect that we were brave little soldiers and that the Irish had character. Why the hell should we accept the interest rate offered? We should be given the money by those concerned at a rate of 1% because we are saving their bacon.

I hope to God someone from the ECB reads this debate. The ECB flooded the market with cheap money. It did not care where that money went and, of course, it went into our half-baked banks. The ECB was then among those who carried out stress tests on those banks and it informed everyone that they were perfectly all right. Who is the ECB fooling? Why should taxpayers who had no part in what happened be penalised and placed in penury?

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke The Senator has one minute remaining.

Senator David Norris: Information on David P.B. Norris Zoom on David P.B. Norris That is just too bad. I wish I had more time. There are certain areas on which we can focus. I have just been listening to a news report on RTE regarding the Kerry Group, which is a splendid organisation. The Kerry Group began as a little co-op and it now provides 23,000 jobs worldwide. It is to businesses of this sort that we should provide encouragement.

[56]The Minister of State said “It is clear the best way to support businesses and create jobs is to fix the banks”. He should return on Thursday when we will be debating the EU-IMF programme for Ireland and we can then discuss how to fix the banks. I know how I would fix them and I am aware of how the citizens of this country would like to see them fixed.

The Minister of State also referred to our export performance, which is fine. He also indicated that “the Government secured a commitment from the main lenders, AIB and Bank of Ireland, to make available not less than €12 billion in total for new or increased credit facilities to SMEs”. Is this happening now? Is it possible to believe a word those in these two banks say? Will the position in this regard be monitored? Let us consider the figures provided by Mr. John Trethowan in respect of current practice in the banks. These figures indicate that at least 25% of the applications from small and medium enterprises were improperly rejected. That is the only conclusion one can reach in respect of this matter.

The Minister of State referred to prompt payment by the Government within 15 days of receipt of invoices. It is about bloody time.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke I ask the Senator to conclude.

Senator David Norris: Information on David P.B. Norris Zoom on David P.B. Norris I am doing so. What is being done with the National Pensions Reserve Fund is disastrous. There is a train crash coming down the line in respect of pensions and the EU and the IMF are being allowed to dip their nasty little fingers into this fund.

I had hoped to speak after my colleagues, Senators O’Toole and Mullen. I do not have permission to move their amendment to the motion but I am very interested in it. I would like a proper examination to be carried out in respect of the proposal for metro north. I hope this project proceeds and I was very much involved in progressing it in the early stages. The project must provide good value, however, and must give rise to the creation of the envisaged number of jobs.

The second part of the amendment in the names of Senators O’Toole and Mullen refers to the moral hazard created by narrowing the gap between welfare and wages giving rise to a need for an immediate reversal of the decision to reduce the minimum wage. I was not able to give my support to the amendment as a result of the inclusion of this stipulation. I want to protect people on the minimum wage. I have been lobbied by restaurant owners, however, who are going out of their minds in respect of this matter. If we could take account of the needs of the restaurant sector while protecting the minimum wage to the largest degree possible, progress could be made. An absolute disaster has been visited upon restaurant owners as a result of the kind of wages they are required to pay to, for example, those who work on Sundays.

Let us consider this matter sector by sector.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke The Senator must conclude.

Senator David Norris: Information on David P.B. Norris Zoom on David P.B. Norris Is it not appalling that multibillionaires are buying petrol for their yachts in Monte Carlo at the expense of the weakest in society? This is being done by reducing the hourly rate of the minimum wage by €1 and it is an utter moral scandal. We in this House should stand for decency and principles and for those who are at the lowest point on the scale. From what he said at the end of his very moving contribution, I know that, in his heart, the Minister of State shares that view. I do not care if people read what I have said but I hope to God they do.

Senator Dan Boyle: Information on Dan Boyle Zoom on Dan Boyle I think the Senator just provided us with a preview of Thursday’s speech.

[57]Senator David Norris: Information on David P.B. Norris Zoom on David P.B. Norris Senator Boyle has not heard the half of it yet.

Senator Dan Boyle: Information on Dan Boyle Zoom on Dan Boyle I look forward to hearing the remainder.

Senator David Norris: Information on David P.B. Norris Zoom on David P.B. Norris The Senator might agree with much of it.

Senator Dan Boyle: Information on Dan Boyle Zoom on Dan Boyle I might do so.

Deputy Billy Kelleher: Information on Billy Kelleher Zoom on Billy Kelleher Perhaps we might rename metro north “metro Norris”.

Senator Dan Boyle: Information on Dan Boyle Zoom on Dan Boyle I presume the motion we are debating is a criticism of the four year plan, particularly in the context of the perceived lack of specificity in respect of job creation measures. I also presume the purpose of the Labour Party’s tabling this motion is to argue the point in that regard. Is what is being sought specific reference to the number of jobs in each sector and to the taking of targeted approaches over a number of years? The Minister of State clearly indicated that in light of the economic conditions in which we are operating and the general philosophical approach to governing this country, it is not possible for Irish Governments to create jobs directly. The best that can be done is to foster a climate in which jobs can be created.

It is hoped we can stabilise the level of unemployment and begin to reduce it. There was obviously a great increase in employment during the Celtic tiger years. When the Celtic tiger went bust, there was a dramatic decrease in employment in a short period. One thing is certain, namely, we will not be able to recover the jobs that have been lost in a similar timeframe. A longer period will be required to recover those jobs. We are honest enough to admit that even after the four years of the national recovery plan, the level of unemployment will be in the region of 10%. It is slightly dishonest for people to pretend that matters might be otherwise.

The only way to proceed differently would be to revert to the days of the central command economy. There was a time, even as late as the 1980s, when Ireland was accused, in the context of how the Government ran the economy, of being the most centrally controlled state outside of Albania. If it is being suggested that we should return to a period when jobs were created for the sake of doing so and regardless of their export potential, their value added potential or their sustainability, then we would dig an even deeper hole for ourselves in a very short space of time. The debate should focus on those aspects of the matter.

  7 o’clock

Strangely enough, our State companies are among the better performing enterprises in the country at present and are creating jobs. It is somewhat churlish to refuse to accept that jobs are being created. Even with the economy at a standstill, 50,000 jobs are created each year. Many of these are being created in the green and smart economy sectors. In the past year, 20,000 jobs have been created in the energy sector alone. The Labour Party for the past 18 months has been claiming the Government’s retrofit programme as being of its invention. The establishment of this programme came about as result of a direct contribution by the Green Party to the work of the current Administration. When the programme for Government was agreed in 2007, it was hoped that during our then anticipated five-year term of office, 100,000 homes would be retrofitted. The programme has been ramped up to such a degree that 100,000 homes per year are being retrofitted. The expansion of the programme has led to the creation of 5,000 direct jobs. We need to identify and promote similar initiatives in other areas.

Several speakers referred to the general matter of creating a more enterprising economy, ensuring there is access to working capital and seeing to it that an enterprise culture is fostered, developed and harnessed. I am of the view that initiatives relating to this matter would be ongoing, regardless of which parties were in government. There are key philosophical points, [58]however, which must be understood in respect of what might be the differences between various political parties or Governments of whatever composition.

One of the differences to which I refer relates to education. The recent visit of the European Commissioner, Olli Rehn, emphasised this point. What the Commissioner found to be most acceptable and of most assistance in terms of the recommendation of the four year plan was the emphasis on both enterprise and education. The latter is important to underpin the medium and long-term success of the economy. There has been little reference to that matter during this debate and greater consideration should be given to it, especially as we have fallen down in respect of it in the past. Action must be taken on many levels. In the first instance, the workforce must be made competent in the context of operating in a vastly changing technological age. The second point is that there is a need to retrain workers in any event. The third aspect is that we must take workers from particular sectors and move them into new areas. Construction is the obvious example in this regard. The retrofit programme takes into account some of those who will not be building new houses. We have far too many new houses in any event.

Another example is the area of heritage. I received a delegation in my constituency office in recent days — I do not know whether the Minister of State had the same experience — from a newly constituted group of tradesmen who take an old approach to their trade and who style themselves the ancient guild of stonemasons. They are of the view that the way to bring the large number of new apprentices operating in the area of stonemasonry — these individuals work with brick, mortar and block — up to speed is to encourage them to work on heritage projects.

In the Cork area there is much potential in terms of the redevelopment of Fort Camden and Spike Island and other heritage sites such as Charles Fort. If one is talking about direct Government intervention in linking education and training, that is a possibility and where we should be focusing some of our efforts. Obviously, I have given a local example in Cork but, no doubt, examples could be found elsewhere in the country.

In terms of job creation, we need to bring about what the Minister of State referred to, that is, fostering a climate of hope and confidence and a belief jobs can be created in the knowledge they will be sustainable. The biggest dint we have taken in the past few years with the increase in the number of job losses in such a short period of time has been in respect of the belief bubble economies are what we should live with from here on, and that there will be rapid rates of growth followed by rapid rates of declines. If we have learned anything from this period of our economic history it is that we must develop economies slowly, that we must make them sustainable and protect them from the international pressures which cause damage in the short term. If we get that right, we might prevent the cycle we are seeing and saw in the 1980s, 1950s and 1930s. As we approach the hundredth year of independence as a state, we can teach future generations what we have learned and put these lessons into practice. I hope they transcend political differences because it will be a challenge to the Government and its immediate successor to put them into practice in the next year or two which will be vital years, not only in dealing with the uncertainty of the moment but in putting in place the bedrock to ensure we will never come back to this place again. If that is understood across the political spectrum, the hope we need to gain for Ireland can be gained quickly.

Deputy Brendan Ryan: Information on Brendan Ryan Zoom on Brendan Ryan I welcome the Minister of State. In the short term the fiscal and banking issues must be resolved, but our recovery will be all about the creation of jobs. It is my party’s view that the focus was not put on job creation until quite recently by the Government. As my party’s motion states, every unemployed person costs the State about €20,000 [59]between social welfare payments and lost income taxes and contributions. This must be factored in in considering the cost of all decisions made.

It is proposed to make vicious cuts in social welfare payments in the four year plan, but the best way to save money on the social welfare bill is to get people back to work. It would also result in the growth required. However, there is nothing of significance in the four year plan to address this problem.

There are many shovel-ready capital projects to be undertaken. Schools need to be built, while insulation work needs to be carried out. In other words, there are actions that could be taken straightaway to get unemployed construction workers back to work. The Minister of State referred to plans in terms of retrofits, etc. We must do this work quickly. It must be accelerated. However, we must also wean the economy off its dependence on construction. In the medium term we must return to growth and expand our export base. There is positive development in that regard, which must be acknowledged.

In an increasingly global economy we must look strategically at what we do well in Ireland and try to excel at them. I want to talk about three areas in particular. Agriculture and food production are obvious ones. Rather than exporting commodities, as we do to the United Kingdom and other countries in Europe, we must add value and export to more sophisticated markets. Indigenous companies must be positioned to export to emerging markets such as Brazil, India and China. Enterprise Ireland is doing good work in this regard, but it must do more, do better, be properly resourced and pointed in the right direction. We need to be more ambitious for it. Its brief is to support companies in the traded services sector or exporting manufacturing companies only. County enterprise boards could support companies with up to ten employees only. If these smaller companies are to be successful and grow and have more than ten employees, where can they go for support? Enterprise Ireland can do nothing for them, and this must change. That serious gap is acknowledged everywhere we go when people talk about these issues which can be addressed if there was the will to do so. County enterprise boards have had their budgets cut by in the region of 30% this year. How can this be right at a time when we should be doing everything possible to get people back to work?

Another sector that is of importance to us and in which we could excel is tourism. Its importance has been underlined by the United Nations World Tourism Organization in its Tourism and Economic Stimulus — Initial Assessment of 2009 which urged all governments “to put Tourism at the core of their stimulus packages because the jobs and trade flows from a strong tourism sector, as well as business and consumer confidence in travel, can play a big part in recovery”. There are many fine proposals contained in Deputy Upton’s recent tourism document entitled, Extending the Welcome, but is the Minister of State aware that we make it so difficult for tourists to come here from India, China and elsewhere? For several months I have been working on a case to try to get a Chinese national here on holiday to visit an Irish friend who is well capable of supporting her and can guarantee this. The Minister of State would not believe the obstacles placed in front of her and her Irish friend. We should be welcoming the tourist dollar, not rejecting it.

A third area in which we should have a competitive advantage is green energy. There is tremendous potential to develop offshore wind farms around the coastline. Ireland has an enormous untapped indigenous power source in offshore wind energy. The National Offshore Wind Association of Ireland claims such projects present an opportunity to Ireland to become the green power centre of Europe and an international centre for the development of new offshore wind technologies. To harness this potential, there is a need for the Government to put in place a framework which would recognise the long-term benefits of this resource. The Labour Party, in its policy document, The Energy Revolution, brings forward plans for a [60]national energy efficiency retrofit programme to create at least 30,000 direct construction jobs. It is hard to understand the absence of a major insulation programme for schools, hospitals, Garda stations and public buildings, even though there are thousands of construction workers with the necessary skills available.

These are some of the things Ireland can do well and it is this approach, identifying areas in which we can be the best in the world, which will reap rewards. I am not saying none of this is happening but more must be done. It is a national imperative. More proactive strategies are needed. The unemployment rate is running at approximately 13.7% and the OECD projects unemployment in Ireland will still be at 13% by the end of 2011. In 2008, 25% of the total number of unemployed were long-term unemployed; the number now stands at 43%. There is a crisis emerging which needs an appropriate and urgent response. Labour market activation measures are needed more than ever. While I accept large fiscal deficits are making this more difficult to achieve, the jobs crisis is far from being resolved, even though Government spokespersons have been pointing to the small reduction in the number on the live register as evidence to the contrary. Those who have left the live register are now in foreign countries such as Canada, Australia and the United States and more are leaving by the day. Training and placement opportunities are needed and must be at the top of our political agenda. The crisis in FÁS is not helping and the reorganisation is taking its toll. We need a functioning organisation at this time to get the unemployed back to work quickly before there is structural long-term unemployment, before people lose hope and there is dependency on welfare payments.

With the public finances in such a disastrous state, we must adopt a value for money approach to all of these matters. There must be a proper analysis of what works and what has not worked and we must learn from best international practice. We must also learn from those who have participated in some of the current programmes. Let us be prepared to ask them about their experiences and act on the results of these surveys. We must be prepared to scrap some of the low level training programmes which may be of little benefit in favour of more challenging programmes linked with training opportunities in more diverse sectors. It is no longer appropriate to have a plethora of construction-related courses, with the exception of those which have a green energy focus. Why not introduce training courses which would appeal to those seeking careers in the media, including newspaper journalism, public relations, marketing, sports, including greenkeeping, etc., which are not readily available? There is an excessive emphasis on computer programmes in the FÁS courses available.

Unemployment subsidies must be expanded and targeted at new recruits, the long-term unemployed and other vulnerable groups. Job search assistance and monitoring is essential. Processes must be put in place that ensure a person becoming unemployed for the first time comes in contact with a case officer within at most two weeks, and thereafter has planned continual appointments and follow-up. It is not good enough merely to tick the boxes on this most important aspect of getting people back to work quickly.

We must also focus on our graduates, 30% of whom are unemployed according to a recent UCD survey. Recently, the Union of Students in Ireland attended a meeting of the Joint Committee on Enterprise, Trade and Innovation and gave us its thoughts and a proposal for a meaningful national internship scheme. Students would work for their dole while getting valuable work experience and would also bring their skills to the enterprise, which is very important. This should be done immediately. Let us give our graduates a reason to stay rather than a reason to emigrate. At least give them something to think about before they decide to emigrate.

We have a structural problem with welfare in this country. I am not talking about the so-called unemployment traps referred to by the Minister of State which are constantly peddled about unemployment benefits being too high and thus preventing unemployed people from [61]taking up low-paid jobs. The same traps did not prevent the unemployment rate from going to 4% during the boom, so I do not accept the arguments.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke I ask Senator Ryan to conclude.

Deputy Brendan Ryan: Information on Brendan Ryan Zoom on Brendan Ryan In a recent article in The Irish Times, Professor Brian Nolan stated that cutting welfare benefits will not incentivise people to take up jobs that do not exist. Neither will the reduction in the minimum wage achieve anything in line with what the Minister of State had to say. The structural problem to which I refer is the difficulty in taking up short-term jobs, perhaps for a month or six weeks. This is an important point and I will finish on it. The transfer between these type of jobs and welfare payments should be seamless. There should be no need for fresh applications and no delays in payments after such short-term jobs have finished. Unless this happens, people will not take up these jobs.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke Senator Ryan is eating into other speakers’ time.

Deputy Brendan Ryan: Information on Brendan Ryan Zoom on Brendan Ryan At a recent economic conference in Balbriggan which I attended, there was a show of hands by business people as to who had work available if they could afford to hire. Approximately 15 to 20 of the 70 business people present put up their hands. We must find a way to tap into this and other opportunities and give them the priority they properly deserve.

Senator John Hanafin: Information on John Gerard Hanafin Zoom on John Gerard Hanafin I wish to share time with Senators Ann Ormonde, Larry Butler and Ivor Callely.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke Is that agreed? Agreed.

Senator John Hanafin: Information on John Gerard Hanafin Zoom on John Gerard Hanafin I support the Government amendment and in doing so I recognise some interesting points are made in the non-Government motion. These stem from the question of a public private partnership for metro north and the suggestion we examine the offer from Siemens Ireland to install water meters. The details of these proposals would have to be worked out but the proposals themselves are quite laudable. The non-government motion is incorrect to state the Government’s four year plan contains nothing by way of concrete measures to restore employment. It quite clearly does. It refers to the €500 million innovation fund, the employment subsidy scheme and the enterprise stabilisation fund. Not only this, the four year plan specifically states that protecting those who have lost their jobs and getting them back to work is the most pressing priority of the Government.

Many and various areas of where we can grow our economy have been mentioned in the debate and it is very obvious that growth will be export led. As the third most globalised economy in the world, there is no question or doubt that we will share disproportionately in the 4.5% growth in the world economy this year and next, and the targets we have set for growth will be reached. With this in mind, many people have suggested certain areas for growth, and agrifood is an ideal area as commodity prices of late have been quite strong, stemming from demand which is reflected in the growth in world economies. Tourism is another obvious area and I ask the Minister of State to examine tourism from Brazil, Russia, India and China in particular as there are difficulties with people from there obtaining visas.

The motion also contains a proposal on the €10 travel tax which is seen as a panacea. I am glad the Minister with responsibility for this area has requested those who have an interest in it, namely, the airlines, to come up with proposals. The idea that the €10 tax can be reduced at present without concrete proposals from the airlines as to what extra business they will bring in is unreasonable. I believe the Minister will receive proposals. These proposals should not be [62]used again by any company to renegotiate for lower landing fees. If proposals are made, I hope they are specific to the €10 tax and not used again and again to try to get a better deal in every possible area, having made a deal on the €10 tax.

One of the new areas we will be looking at is supporting indigenous industry and the Kerry Group has been referred to. Other groups will emerge and these will be very innovative. The innovation of the people is coming through in the hour of necessity. We are getting through quite clearly and quite well and we are on a very strong trajectory.

I do not wish to eat into anyone else’s time. I suggest the Government has taken the correct path in the narrow confines in which it has found itself and this path has been backed up by the EU, the IMF and the four year plan. When the election is held with the budget behind us, we will have put this country on the road back to recovery.

Senator Ann Ormonde: Information on Ann Ormonde Zoom on Ann Ormonde I will be very brief. I welcome the Minister of State and I especially welcome the points he made when he spoke from the heart at the end of his speech. These are the points about which I wish to speak and which I want to endorse. The Minister of State said we are here to reform the banking system and to create an environment for job creation. I welcome and endorse the points made on how we are to go about this. The Minister of State mentioned maintaining the 12.5% corporation tax and the importance of metro north and its potential to create 35,000 jobs. I thought the water metering system was a very interesting idea and we should accept the offer from Siemens which stated it would install meters without any cost to the State. This is something we should discuss again.

Let us stop points scoring. I stated this on the Order of Business earlier. We have a golden opportunity to speak about the future of Ireland and keep our heads high. There is talk about our sovereignty and independence being diluted and our neutrality gone. I see nothing wrong with asking for money if we need it. There is nothing wrong with this and I keep my head high. Let us put hope back into our system. Let us give confidence to the people. Let us try to educate the broader public about what we are doing to correct measures and not talk to ourselves and score points.

I echo everything the Minister of State said. I endorse the points he made on national recovery, development skills and preparing young students coming out of schools and colleges for work experience programmes. These are the areas where I want to see co-ordination between the Departments of Education and Skills, Enterprise, Trade and Employment, and Social Protection. As these Departments have not worked well together, I hope from here on in there will be better co-ordination between them because this is where the jobs are and this is how we will make the transition from school or work experience to work.

Senator Ivor Callely: Information on Ivor Callely Zoom on Ivor Callely I welcome the opportunity to participate in this Private Members’ debate on the National Recovery Plan 2011-2014. We seem to be on a roller-coaster of an economic and financial nightmare with everything falling apart. There is a general air of anxiety and demoralisation. Unemployment and financial burdens have brought hardship, suffering and personal degradation into almost every home. The spectacle of well-educated young people unable to find suitable work and being forced to emigrate is deeply regrettable. The social advances made over the past decade, along with other advances made by our country are likely to be affected. The perception is that the Government is adjusting everything downward with mass unemployment, financial crisis, additional taxes, widespread hardship and an inability for this Fianna Fáil-led Administration to govern. I know it is not necessary, but I will take this opportunity to give the Government, through the Minister of State, a very clear message from the public, that we are holding it responsible for the mess this country is in.

[63]For a variety of political gains, there has been a destructive propaganda campaign about the economy, our finances and the Government’s administration. A vacuum has been allowed to develop and there is a widespread feeling among the public that there is no one at any level in the current Administration capable of taking control. The view is that the Government is completely at a loss and unable to cope. We are just short of the masses shouting: “Crucify him; crucify him.” Although the festive season is approaching, I do not share this type of play, especially at such a crucial period in our country’s history. The Government has made mistakes and should raise its hand and apologise.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke The Senator should conclude.

Senator Ivor Callely: Information on Ivor Callely Zoom on Ivor Callely It should apologise and spell out in user-friendly understandable language how we can get ourselves out of the mess. The Government is not getting the message across.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke I ask the Senator to conclude now.

Senator Ivor Callely: Information on Ivor Callely Zoom on Ivor Callely It is foolishly irresponsible for anyone to think that simply to change the political leadership will totally change the outlook for the country. The grim reality is that the globe is going through an exceptionally difficult period and the euro seems to be the target for the hit. I regret I do not have the time to conclude my contribution.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke I call Senator Phelan.

Senator Larry Butler: Information on Larry Butler Zoom on Larry Butler Four of us were included in the time slot, including me.

Senator Ivor Callely: Information on Ivor Callely Zoom on Ivor Callely It was two minutes each. Senator Butler was to be given two minutes.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke I understood it was four minutes for himself and then two slots of two minutes.

Senator Ivor Callely: Information on Ivor Callely Zoom on Ivor Callely No, it was to be two minutes for each of the four of us.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke The eight minutes has concluded.

Senator Ivor Callely: Information on Ivor Callely Zoom on Ivor Callely In fairness, the Senator should be allowed two minutes. Perhaps Senator Phelan would allow that.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke The eight minutes has concluded. I apologise, but I did not hear Senator Butler’s name mentioned. Senator Hanafin had four minutes.

Senator Larry Butler: Information on Larry Butler Zoom on Larry Butler Was I not on the list?

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke Yes, but——

Senator Dominic Hannigan: Information on Dominic Hannigan Zoom on Dominic Hannigan I would be happy for two minutes to be afforded to the Senator. That would not be a problem for us.

Senator Larry Butler: Information on Larry Butler Zoom on Larry Butler I will be quite brief. I just wish to make a few points.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke That will mean Senator Hannigan will have to give up two minutes of his time.

Senator Dominic Hannigan: Information on Dominic Hannigan Zoom on Dominic Hannigan I suggest we should extend the overall time by two minutes.

[64]An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke We cannot do that.

Senator Phil Prendergast: Information on Phil Prendergast Zoom on Phil Prendergast We facilitated the House twice today.

Senator Dominic Hannigan: Information on Dominic Hannigan Zoom on Dominic Hannigan Senator Butler should be facilitated on this occasion.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke Senator Hanafin took four minutes and the time is up now. I call on Senator Phelan to finish. I apologise to Senator Butler.

Senator John Paul Phelan: Information on John Paul Phelan Zoom on John Paul Phelan I will allow Senator Butler have my last minute if he wishes to contribute.

Senator Larry Butler: Information on Larry Butler Zoom on Larry Butler I thank the Senator.

Senator John Paul Phelan: Information on John Paul Phelan Zoom on John Paul Phelan I welcome the Minister of State. I was determined not to be political or to try and score points in my comments, but it is difficult not to. I had to send a text message to people today to inform them that my branch AGM had been cancelled because of the snow. I had to look through every number in my phone book to do that. I noticed that a significant number of my contacts now live in Canada, Australia and London because of the policies pursued by the Government and the policies that have elected people such as the Minister of State to the Dáil in the past 13 years. It is difficult not to try to score points as a result.

I commend the Labour Party and fully support its motion. This is what politics is about. The motion brings our economic mess back to the fundamental issue of employment, which is central to people’s lives. If employment is not available, people will leave the country. People’s lives have been ruined because of the policies that have been pursued by Fianna Fáil and its different friends in government in the past 13 years. This makes it difficult not to be party political when pointing that out.

I want to mention some other issues with which the Minister of State was in agreement in his speech. Senator Boyle stated that the Minister of State said the Government does not create jobs. This is my second term in the Seanad and I am aware that the numbers employed in the public sector demonstrate that Fianna Fáil and the different parties in Government spent significant money creating jobs during the past 13 years. If we examined the increase in the numbers employed in the public service, we would see it coincided with election times. There were also huge increases in public expenditure at those times. It is a bit rich now for the Government to say it is not the Government’s job to create jobs, although I believe it is not its job. I agree with the Minister of State’s comments that the Government should focus on the work environment.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke The Senator should conclude.

Senator John Paul Phelan: Information on John Paul Phelan Zoom on John Paul Phelan I did not get my seven minutes.

An Leas-Chathaoirleach: Information on Paddy Burke Zoom on Paddy Burke The Senator did not have seven minutes. I apologise for that. The Senator said he would give his last minute to Senator Butler.

Senator John Paul Phelan: Information on John Paul Phelan Zoom on John Paul Phelan I would like to make a few other points. I will give him the last half minute. The Government must create an environment where jobs can be fostered. This motion is important in that context. Senator Hanafin mentioned that the four year plan states it is the Government’s priority to stimulate jobs, but there is little else in that regard in the plan. Surely job stimulation should be at the core of the four year plan, but it is hardly mentioned and there is little concrete detail on how it will be done. I am not happy about that.

[65]I had wished to mention several other issues, but will stop on two final points. I agree completely with Senator Ryan on the importance of the two sectors he mentioned for stimulating employment, agriculture and tourism. This would not require significant investment from the State as the infrastructure for both is in place. These two areas still have tremendous potential for the creation of significant employment for the future. I do not agree with Senator Hanafin on the travel tax which was imposed, partly at least, because of the difficulty the Government had with a particular private air transport operator. The Government has stubbornly stuck to it, despite that it has done increasing harm to the tourism sector in the past 18 months.

Senator Larry Butler: Information on Larry Butler Zoom on Larry Butler I wish to put an important point to the Minister of State. I endorse and welcome the four year plan. One thing that should have been included in the plan, however, is mention of the energy industry. Even at this late stage, an addendum should be made to the plan to ensure companies such as Spirit of Ireland, which could invest €3.5 billion over the next few years to build a system that would allow us export electricity, are mentioned. This is vital and would ensure our electricity base prices would remain among the lowest in Europe. It is also important to bear in mind that in 1985 we were paying 35p out of every £1 for our borrowings, but our new borrowings under the EU and IMF loans will only cost approximately 22 cent out of every €1. It is important to remember this. With bond holders currently offering money at 9%, the deal we have been offered is reasonable, although I would have liked us to have been able to borrow at 5%. The Minister of State should look at including an addendum in the four year plan with regard to the energy industry.

Senator Dominic Hannigan: Information on Dominic Hannigan Zoom on Dominic Hannigan I welcome the Minister of State to the House and thank all the Senators who contributed to this debate. I do not want to criticise the various political parties for their actions over recent years. We all know the state the country is in, know the gist of the national recovery plan and have our views on whether the growth rates contained in the plan are likely to be realised. One thing we can all do is to play our part in trying to create as many jobs as possible.

In that regard, I welcome the contributions from the various Senators who have come up with ideas as to how to generate jobs. In recent months I have spoken to people in many businesses across my county of Meath and to people who would like to set up new businesses. I listened to the messages they would like to send to the House with regard to what we can do to make it easier to create local jobs. The key issue which arises repeatedly is the lack of access to the credit market. My colleagues have spoken about our ideas for a strategic investment bank and this would not be before time. It is something that should be created as soon as possible. We also need to look at bill payment mechanisms. Currently, some large companies wait for months before they pay their small subcontractors. We may need additional legislation in this area to ensure people pay their bills on time.

We need to take a look at social welfare with regard to sole traders and people who start their own businesses. Many of these people who go out of business find that they have no access to social welfare. This needs consideration. Senator Butler mentioned green economy jobs. We can generate additional jobs in this area. Ireland has some of the highest wind speeds in the world. Denmark has managed to generate more than 20,000 jobs in the wind generation sector. We should identify the problems that arise in creating jobs in this sector in Ireland. One issue that repeatedly arises is access to the grid and the gates process. We need to find out the constraints that inhibit producers from accessing the electricity network. There is further potential in other areas of green energy. For example, every euro we spend on the biomass industry generates 70 cent of local expenditure.

[66]We need to follow the example of France and Germany by supporting our artisan food and craft industry. Officials in France see their role as facilitating production whereas our officials often see themselves as gatekeepers. We need to help rather than hinder new industries.

Tourism is one of our greatest assets. Senator Ryan spoke about the potential for job creation in that sector. I have heard great ideas from people in my own county. A Book of Kells heritage centre could become the key destination for visitors to the Boyne Valley and County Meath. The beautiful courthouse building in Kells, which is being refurbished at present, could become the nucleus for a heritage centre, thereby giving tourists an opportunity to learn about the Boyne Valley and the historic town of Kells. I will be requesting Fáilte Ireland to fund that project. Similar projects could be pursued in every town and village in Ireland.

We can continue to grow employment in the tourism, agriculture and green energy industries. All we hear at present is bad news but having consulted many people from County Meath and elsewhere, I believe we have the talent and enthusiasm to recover and it would not take much to put the economy back into shape. My colleagues have outlined the way we should proceed. I thank Senators for their contributions and commend the motion to the House.

Amendment put.

The Seanad divided: Tá, 29; Níl, 17.

Information on Dan Boyle Zoom on Dan Boyle Boyle, Dan. Information on Martin Brady Zoom on Martin Brady Brady, Martin.
Information on Larry Butler Zoom on Larry Butler Butler, Larry. Information on Ivor Callely Zoom on Ivor Callely Callely, Ivor.
Information on James Carroll Zoom on James Carroll Carroll, James. Information on John Carty Zoom on John Carty Carty, John.
Information on Donie Cassidy Zoom on Donie Cassidy Cassidy, Donie. Information on Maria Corrigan Zoom on Maria Corrigan Corrigan, Maria.
Information on Mark Daly Zoom on Mark Daly Daly, Mark. Information on Mark Dearey Zoom on Mark Dearey Dearey, Mark.
Information on John Ellis Zoom on John Ellis Ellis, John. Information on Geraldine Feeney Zoom on Geraldine Feeney Feeney, Geraldine.
Information on Camillus Glynn Zoom on Camillus Glynn Glynn, Camillus. Information on John Gerard Hanafin Zoom on John Gerard Hanafin Hanafin, John.
Information on Cecilia Keaveney Zoom on Cecilia Keaveney Keaveney, Cecilia. Information on Terry Leyden Zoom on Terry Leyden Leyden, Terry.
Information on Marc MacSharry Zoom on Marc MacSharry MacSharry, Marc. Information on Lisa McDonald Zoom on Lisa McDonald McDonald, Lisa.
Information on Paschal Mooney Zoom on Paschal Mooney Mooney, Paschal. Information on Niall Ó Brolcháin Zoom on Niall Ó Brolcháin Ó Brolcháin, Niall.
Information on Brian Ó Domhnaill Zoom on Brian Ó Domhnaill Ó Domhnaill, Brian. Information on Labhrás Ó Murchú Zoom on Labhrás Ó Murchú Ó Murchú, Labhrás.
Information on Francis O'Brien Zoom on Francis O'Brien O’Brien, Francis. Information on Denis O'Donovan Zoom on Denis O'Donovan O’Donovan, Denis.
Information on Fiona O'Malley Zoom on Fiona O'Malley O’Malley, Fiona. Information on Ned O'Sullivan Zoom on Ned O'Sullivan O’Sullivan, Ned.
Information on Ann Ormonde Zoom on Ann Ormonde Ormonde, Ann. Information on Jim Walsh Zoom on Jim Walsh Walsh, Jim.
Information on Diarmuid Wilson Zoom on Diarmuid Wilson Wilson, Diarmuid.  


Níl
Information on Ivana Bacik Zoom on Ivana Bacik Bacik, Ivana. Information on Paul Bradford Zoom on Paul Bradford Bradford, Paul.
Information on Paddy Burke Zoom on Paddy Burke Burke, Paddy. Information on Jerry Buttimer Zoom on Jerry Buttimer Buttimer, Jerry.
Information on Paudie Coffey Zoom on Paudie Coffey Coffey, Paudie. Information on Paul Coghlan Zoom on Paul Coghlan Coghlan, Paul.
Information on Maurice Cummins Zoom on Maurice Cummins Cummins, Maurice. Information on Paschal Donohoe Zoom on Paschal Donohoe Donohoe, Paschal.
Information on Frances Fitzgerald Zoom on Frances Fitzgerald Fitzgerald, Frances. Information on Dominic Hannigan Zoom on Dominic Hannigan Hannigan, Dominic.
Information on Nicky McFadden Zoom on Nicky McFadden McFadden, Nicky. Information on Rónán Mullen Zoom on Rónán Mullen Mullen, Rónán.
Information on David P.B. Norris Zoom on David P.B. Norris Norris, David. Information on John Paul Phelan Zoom on John Paul Phelan Phelan, John Paul.
Information on Phil Prendergast Zoom on Phil Prendergast Prendergast, Phil. Information on Brendan Ryan Zoom on Brendan Ryan Ryan, Brendan.
Information on Liam Twomey Zoom on Liam Twomey Twomey, Liam.  

Tellers: Tá, Senators Niall Ó Brolcháin and Diarmuid Wilson; Níl, Senators Dominic Hannigan and Phil Prendergast.

Amendment declared carried.

Question put: “That the motion, as amended, be agreed to.”

[67]The Seanad divided: Tá, 29; Níl, 17.

Information on Dan Boyle Zoom on Dan Boyle Boyle, Dan. Information on Martin Brady Zoom on Martin Brady Brady, Martin.
Information on Larry Butler Zoom on Larry Butler Butler, Larry. Information on Ivor Callely Zoom on Ivor Callely Callely, Ivor.
Information on James Carroll Zoom on James Carroll Carroll, James. Information on John Carty Zoom on John Carty Carty, John.
Information on Donie Cassidy Zoom on Donie Cassidy Cassidy, Donie. Information on Maria Corrigan Zoom on Maria Corrigan Corrigan, Maria.
Information on Mark Daly Zoom on Mark Daly Daly, Mark. Information on Mark Dearey Zoom on Mark Dearey Dearey, Mark.
Information on John Ellis Zoom on John Ellis Ellis, John. Information on Geraldine Feeney Zoom on Geraldine Feeney Feeney, Geraldine.
Information on Camillus Glynn Zoom on Camillus Glynn Glynn, Camillus. Information on John Gerard Hanafin Zoom on John Gerard Hanafin Hanafin, John.
Information on Cecilia Keaveney Zoom on Cecilia Keaveney Keaveney, Cecilia. Information on Terry Leyden Zoom on Terry Leyden Leyden, Terry.
Information on Marc MacSharry Zoom on Marc MacSharry MacSharry, Marc. Information on Lisa McDonald Zoom on Lisa McDonald McDonald, Lisa.
Information on Paschal Mooney Zoom on Paschal Mooney Mooney, Paschal. Information on Niall Ó Brolcháin Zoom on Niall Ó Brolcháin Ó Brolcháin, Niall.
Information on Brian Ó Domhnaill Zoom on Brian Ó Domhnaill Ó Domhnaill, Brian. Information on Labhrás Ó Murchú Zoom on Labhrás Ó Murchú Ó Murchú, Labhrás.
Information on Francis O'Brien Zoom on Francis O'Brien O’Brien, Francis. Information on Denis O'Donovan Zoom on Denis O'Donovan O’Donovan, Denis.
Information on Fiona O'Malley Zoom on Fiona O'Malley O’Malley, Fiona. Information on Ned O'Sullivan Zoom on Ned O'Sullivan O’Sullivan, Ned.
Information on Ann Ormonde Zoom on Ann Ormonde Ormonde, Ann. Information on Jim Walsh Zoom on Jim Walsh Walsh, Jim.
Information on Diarmuid Wilson Zoom on Diarmuid Wilson Wilson, Diarmuid.  


Níl
Information on Ivana Bacik Zoom on Ivana Bacik Bacik, Ivana. Information on Paul Bradford Zoom on Paul Bradford Bradford, Paul.
Information on Paddy Burke Zoom on Paddy Burke Burke, Paddy. Information on Jerry Buttimer Zoom on Jerry Buttimer Buttimer, Jerry.
Information on Paudie Coffey Zoom on Paudie Coffey Coffey, Paudie. Information on Paul Coghlan Zoom on Paul Coghlan Coghlan, Paul.
Information on Maurice Cummins Zoom on Maurice Cummins Cummins, Maurice. Information on Paschal Donohoe Zoom on Paschal Donohoe Donohoe, Paschal.
Information on Frances Fitzgerald Zoom on Frances Fitzgerald Fitzgerald, Frances. Information on Dominic Hannigan Zoom on Dominic Hannigan Hannigan, Dominic.
Information on Nicky McFadden Zoom on Nicky McFadden McFadden, Nicky. Information on Rónán Mullen Zoom on Rónán Mullen Mullen, Rónán.
Information on David P.B. Norris Zoom on David P.B. Norris Norris, David. Information on John Paul Phelan Zoom on John Paul Phelan Phelan, John Paul.
Information on Phil Prendergast Zoom on Phil Prendergast Prendergast, Phil. Information on Brendan Ryan Zoom on Brendan Ryan Ryan, Brendan.
Information on Liam Twomey Zoom on Liam Twomey Twomey, Liam.  

Tellers: Tá, Senators Niall Ó Brolcháin and Diarmuid Wilson; Níl, Senators Dominic Hannigan and Phil Prendergast.

Question declared carried.

An Cathaoirleach: Information on Pat Moylan Zoom on Pat Moylan When is it proposed to sit again?

Senator Donie Cassidy: Information on Donie Cassidy Zoom on Donie Cassidy At 10.30 a.m. tomorrow.


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