National Recovery Plan 2011-2014: Motion

Senator 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 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.

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

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.

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 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

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,

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

That is what everyone is calling it.

An Cathaoirleach

No interruptions, please. No one interrupted the Senator during her contribution.

Senator 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

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

No interruptions, please.

Senator 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 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 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

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

Hear, hear.

Senator 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 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.

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 ourfigure.

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 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)

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 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 2009vis-à-vis the euro 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.

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, 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.

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 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.

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.

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, 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

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 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

Hear, hear.

Senator David 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?

Seanad Éireann debate - Tuesday, 30 Nov 2010

National Recovery Plan 2011-2014: Motion

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Seanad Éireann debate -
Tuesday, 30 Nov 2010