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 Header Item Financial Resolutions 2013
 Header Item Budget Statement 2013

Wednesday, 5 December 2012

Dáil Éireann Debate
Vol. 785 No. 2

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Financial Resolutions 2013

Budget Statement 2013

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett Before calling on the Minister, I understand there is a slight delay in the book being circulated but the speech is available. That will be circulated in due course.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath They cannot afford a printer.

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As budget day is a good day for taking stock of where we are, let us do so. In the second half of this year, the National Treasury Management Agency, NTMA, has raised more than €7 billion in the markets. The Bank of Ireland, ESB, Bord Gáis and AIB all have raised funds for the first time in years. This year, the IDA has announced 84 projects set to create 8,650 jobs. The economy grew last year and will grow again this year and next year. There are manifest signs that the country is emerging from the worst of the crisis and that the efforts of the Irish people, despite the hardship, are leading to success.

There are different measures of success, however, and in taking stock of where we are, I would like to examine them. The first measure of success is whether the bailout programme is being fulfilled. It is, as Ireland has fulfilled 160 separate conditions of the programme and has now drawn down more than 80% of the low-cost money available under the programme. We also have made the fiscal, structural and legislative changes that provide the basis for a renewed economy that will lead to job creation. If fulfilling the programme was the only measure of success, then we are successful, but, of course, that is not the only measure. We must go back to the markets at sustainable interest rates. The NTMA has secured access for some of our funding this year but we must be certain of market access as needed. If a return to the markets is the measure of success, I am confident we will achieve this objective but as yet it is work in progress.

For the Government, however, and for the Deputies and Senators who support it, the real measure of success is a growing and developing economy, which provides a fulfilling life and decent standard of living for all our people and a country in which everyone who wants to work has a job and where our public services are unsurpassed in their quality. On the basis of this measure of success, despite the progress made, the country still has a long way to go but the Government is prepared to travel that distance. Today, on budget day, the Government recommits itself to this task and political friends and foes alike should be under no illusion; the Government will not resile from the task in hand. It will not dither or procrastinate but will drive forward to lead this country out of the despair and despondency and lack of self worth in which we found ourselves in March 2011.

Deputies: Hear, hear.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan The Government will continue to fulfil the conditions of the bailout programme, it will carefully plan full market return, it will build on the strong sectors of the economy and repair the weak sectors until they are strong again, it will grow the economy and create the jobs for which so many out of work and so many young people yearn.

  Last year, in the budget, despite the lack of resources I took a series of initiatives to grow different sectors of the economy in farming and agrifood, in foreign direct investment, in the export trade, in the tourism industry, in financial services and in the property market and these initiatives have helped to grow and create jobs in these sectors.

SMEs

  This year I will follow a similar strategy but my emphasis will be on small and medium-sized enterprises, SMEs. Our large exporting sector, which includes both multinationals and growing indigenous companies, is forging ahead and delivering solid export growth and a strong balance of payments surplus. I am aware, however, that the operating environment in the domestic economy remains difficult, particularly for small and medium-sized enterprises. To give this critical sector a helping hand, I am bringing forward a ten-point tax reform plan. This plan includes measures that will make a real difference for the SME sectors such as reforming the three-year corporation tax relief for start-up companies to allow unused credits to be carried forward. This will help SMEs and start-ups navigate their early years. It also includes increasing the cash receipts basis threshold for VAT from €1 million to €1.25 million and amending the close company surcharge de minimis level. Both of these measures will improve cash flow for SMEs. The plan also includes amending the research and development tax credit by doubling the initial spend eligible for the credit from €100,000 to €200,000 to encourage innovation and business expansion and extending the foreign earnings deduction for work-related travel to certain countries beyond the BRICS, which will support exports. These measures will make a real difference to SMEs by assisting their cash position and supporting their creation of jobs. I also will publish a public consultation paper on a micro-business tax today.

  Given the fragile state of the public finances, the individual measures are modest. However I believe the combination of the measures will have a significant beneficial impact. I also am pleased to announce an additional initiative that will support small businesses in all sectors of the economy. Virtually all businesses in Ireland rely on cost-effective transport for their inputs and outputs. This transport is provided by hauliers, the majority of whom own small businesses. In order to assist the competitiveness of this key industry, I am introducing a rebate on diesel with effect from 1 July 2013.

Deputies: Hear, hear.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan This initiative will be strictly policed so as to ensure that the beneficiaries are fully tax compliant.

Work is being undertaken by senior officials in a number of Departments to finalise the PlusOne initiative, which is intended to encourage employers to hire individuals who are long-term unemployed. It is envisaged this new incentive will replace the Revenue job assist and the employer PRSI incentive schemes. Details of all the budget measures I am announcing today are set out in the budget documentation. There also are presentations on key sectoral initiatives, including the SME-----

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath On a point of order, this is unprecedented. While I do not wish to interrupt the Minister in his budget speech, ten minutes into that speech-----

Deputy James Bannon: Information on James Bannon Zoom on James Bannon Fianna Fáil wrecked this country.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath -----the budget documentation has not been circulated to the Opposition.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin It will be in a few minutes.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath It is unprecedented and I ask the Minister-----

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett Thank you. We already have-----

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath -----to pause until the budget documentation is circulated to Members.

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett We already have explained.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath It is unprecedented.

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett The Minister will proceed with his speech.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath This is unprecedented and is a disgrace.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan As I stated, all the supporting documentation, including the SME ten-point tax reform plan, will be available on the budget website.

The Government is complementing these taxation actions with a focus on the provision of credit to SMEs. New initiatives from the Government, such as the microfinance scheme and the loan guarantee scheme are now in place. These schemes are complemented by additional credit funds such as those supported by the European Investment Bank, the Silicon Valley Bank and the European Investment Fund, which are targeted at the innovation sector. To further assist SMEs in this area, I am announcing today a number of credit specific initiatives, including approval to the Credit Review Office to extend the team of available reviewers in order that SMEs seeking assistance from the Credit Review Office receive a considered and timely response to their application and the publication by the Credit Review Office of specific guidance for SMEs on accessing credit from banks. Moreover, the National Pensions Reserve Fund also is developing a range of support funds to provide equity, finance and restructuring and recovery investment to the SME sector. The funds are expected to range in size from €100 million to €400 million.

SMEs are the lifeblood of the economy and will play a vital role in the recovery of employment growth in our country.


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