Seán Fleming (Laois-Offaly, Fianna Fail)

I welcome the opportunity of speaking on the Finance Bill 2009. It is significant enough to be dealing with a supplementary budget which was introduced on 1 April 2009. I congratulate my colleague, Deputy Áine Brady, on her recent promotion as Minister of State at the Department of Health and Children and wish her every success in that post.

In my 12 years in the Dáil, I have never seen a major Finance Bill introduced mid-way through the financial year. It is right that the Bill is being introduced. Some people seem to think there is an instant solution to the world's economic difficulties and that the problem can be solved with a single announcement. The Government is continuously watching the national finances and the country's overall economic and financial situation and, where necessary, bringing forward extra measures. This is what is being done on this occasion. We will see another budget before the end of 2009. In a small open economy such as ours, it is right that the Government operate in a flexible manner and be in a position to take corrective action when that is required.

It would be negligent of the Government to introduce a single annual budget and let the economy fend for itself for 12 months. That was all very well when the economy was in a strong position, exports were booming, tax rates were strong and there was strong domestic demand. In those circumstances people wanted less Government interference in their lives and to be allowed to get on with spending their own money. When situations change it is essential that the Government react accordingly. In difficult times, it is important that the Government take a hands-on approach, as it is doing now by introducing a second Finance Bill.

Many measures in the Bill are not popular. We do not like having to introduce them but it is the responsible thing to do. We accept that some measures are not popular but I believe people will soon respect the Government for taking these decisions. Not all of the decisions are perfect. Every Member of the House, and even on this side of the House, would quibble with some aspect of the Bill. It is not possible to be fully right and there is no single magic solution. The Government is doing its best, based on the information made available to it on a monthly basis.

The establishment of the National Asset Management Agency was announced on the day of the supplementary budget. Legislation for this will be brought forward. This is another example of the Government taking a hands-on approach to issues which it would not have had to deal with in previous years.

Ireland is not alone in its difficulties. Many Irish people have Sky television and can watch news programmes from the United States, France, Russia and other countries. It is clear from watching worldwide television stations that people in every country believe theirs is the only country suffering a recession, that their Government is in the worst possible situation and they cannot understand how they got into their present difficulties. People think local. In Ireland, we think about this country and we do not worry about problems in France, Italy, Turkey or anywhere else. However, all of these countries have problems, just as we have. We are all having to fight our own corners but we are all suffering the same vagaries of the international economy.

We are seeing some signs of a pick-up internationally. The world recession has hit Ireland harder than other countries because we are one of the most open economies in the world. The ratio of our exports to total economic production is among the highest among OECD countries. As we are more reliant on a strong world economy we are more affected by a world downturn. Despite this, international figures show that Irish exports are performing better than those of most other exporting countries. Although there is a significant downturn in world trade, the relative downturn in Irish exports is substantially less. We are holding, and even increasing, our market share while other countries are losing market share in the world economy. This is partly due to the nature and quality of our exports. Many of our exports are in the food sector. Food is an essential daily necessity and not a luxury item Computer technology and information systems are also significant exports. They are now essential to every business and in every walk of life. Ireland also exports medical devices and medicines. These are also essential to people's daily lives. These commodities are maintaining their hold on the market.

Other countries which have been heavily reliant on export trade are dependent on the sale of cars and high end luxury electronic items such as plasma TV screens and computer games, demand for which has dropped greatly. Countries which rely on the luxury holiday trade are also suffering. These items are seen as luxuries and purchase of them can be postponed. One cannot postpone one's purchase of food. Because of the make-up of our economy, we will pick up quicker than many of our exporting competitors.

However, we have domestic problems. The Supplementary Budget Statement on 7 April dealt with the establishment of the National Asset Management Agency. This is very welcome. The agency is being discussed in every home and television studio in Ireland, and there are significant differences of opinion about it. There is no single answer to all our difficulties. The task of the Government is to take account of all available information, make the best possible decision and work through that decision. This evening, during Private Members' time, we will hear one Opposition party demand the instant nationalisation of the banks while another will oppose that approach. The Government is somewhere in the middle. It is taking control of the difficulties without actually nationalising the banks. That is the correct middle ground.

There will be inherent difficulties, no matter what approach one takes. One of the reasons quoted for the privatisation of Irish Life, which was a state supported commercial organisation, was that it could not do business in certain countries, such as the United States, which did not want state controlled financial companies operating in their jurisdictions. If we were to nationalise Irish banks, they would immediately be prohibited from carrying on some of their banking activities in certain countries which do not like the concept of state controlled or state monopolised banking institutions operating within their economies. We should not forget this fact of life, even though some people think it is not an issue. We are part of a world economy and we must operate on that basis.

We have heard of Allied Irish Bank increasing the write down of its property portfolio. It has gone to €4.3 billion in the last number of days, which is up a significant amount, and it may increase again. If it requires legislation as part of NAMA or something else, it must be done but I have no wish to see these write-downs being allowed to be carried forward by the banks and financial institutions as losses against a future corporation tax bill. That would represent a further subsidy to them by the taxpayer. They have made a mess of it and are being bailed out, more than generously, by the taxpayer.

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