Dáil Éireann debate -
Tuesday, 1 May 2001

Vol. 535 No. 1

Written Answers - EU Summits.

Ruairí Quinn

Question:

262 Mr. Quinn asked the Minister for Finance if, in respect of commitments made at the Lisbon Summit 2000 concerning economic reform in order to make the European Union the most competitive economic area by 2010, he will list the number of measures that have to be undertaken by his Department; the stage at which these measures are; the title and brief description of each measure; when it is expected to have the measure taken or implemented; and if he will make a statement on the matter. [11762/01]

Minister for Finance (Mr. McCreevy)

At the meeting of the European Council in March 2000, the European Union set itself a strategic goal over the next ten years of becoming the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion. The Government has been responding to the Lisbon strategy in a number of ways at both EU and national levels.

At EU level, my European colleagues and I have monitored progress in furthering the Lisbon objectives in the Council of Economics and Finance Ministers. My Department has contributed to the implementation of the Lisbon agenda at regular meetings of the EU Economic and Financial Committee and the EU Economic Policy Committee. This has included work on the financial implications of population ageing, the impact of the public finances on growth and employment, progress on a number of the priorities identified in the financial services action plan, and the identification of structural performance indicators to measure economic progress in achieving the Lisbon objectives. Much of this work is ongoing and a definitive date for completion of the work is not available.

In addition, the Department of Finance hosted a meeting of the EU Economic Policy Committee in Dublin in June 2000. The effectiveness of the Cardiff process, which monitors member states' progress with regard to liberalisation of product, capital and labour markets, was reviewed in light of the objectives agreed at Lisbon. In November 2000, the Department of Finance published the third annual progress report on the reform of product and capital markets in Ireland as a contribution to the annual country examination process under the Cardiff process.

At the national level, the Lisbon strategy correctly focuses on key issues of relevance to all member states such as ways in which Government tax and expenditure policies can boost growth and employment, the need for investment in human capital and research and development, as well as the need to prepare now for the financial implications of population ageing. In this respect, the Lisbon strategy in many ways complements and mirrors the Government's own policy priorities.

As regards the impact of tax and benefit systems on employment, over the course of the past four years the Government has cut the higher and standard income tax rates by six percentage points each to improve the incentive to work and to contribute to the development of the economy. The Government has also radically improved the position of the lower paid in the tax system, so that now nearly 668,000 of the 1.7 million income earners in Ireland are outside the tax net.

As regards investing in people and in research and development, the national development plan allows £13 billion, or one quarter of its funds, for employment and human resources. A total of £1.5 billion in the national development plan has been earmarked specifically for investment in research, technological development and innovation. As regards preparing for the implications of population ageing, we will be continue to allocate at least 1% of GNP annually to build up the National Pension Reserve Fund to provide for the public finance implications of population ageing. The decision to establish the fund represents a sound and far-seeing approach to budgetary planning. The amount in the fund already stands at over 6% of GDP.