Vol. 430 No. 5
21 Mr. Barry asked the Minister for Finance his views on an article in a newsletter (details supplied) pointing out that the overall climate for job creation in the budget was not tackled; and if he will make a statement on the matter.
I reject this assessment of the employment impact of the 1993 budget: the measures which I announced in the budget were focused on the overriding priority to promote jobs, including the improvement of the climate for job creation. In the shorter-term the budget provided for a massive injection of capital resources which will provide many new jobs, particularly in construction, and which will also strengthen the longer-term growth capacity of the economy. The central element in the budget, however, was the maintenance of macroeconomic and fiscal discipline which are crucial for investment and long-term growth which in turn are essential for sustainable employment growth.
The developments in the economy since the end of February vindicate the stance I took in the budget; interest rates have fallen sharply, and the key Central Bank short-term facility interest rate is now at its lowest level since 1989. The Deputy will be interested to hear that the body in question has acknowledged this in the April issue of its newsletter by referring to the "...confidence of investors in the Government's firm fiscal stand in the February budget.". The article goes on to say that "The Government's commitment to holding the Exchequer borrowing requirement at under 3 per cent of GNP gave positive signals about the overall stance of the financial management of the economy and as such helped to reduce interest rates." and that "...the fall in interest rates is likely to boost economic activity...". I think that it would be a fair summary of these comments to say that the 1993 budget has succeeded in improving considerably the climate for job creation.
