Batt O'Keeffe (Cork North West, Fianna Fail)

I welcome the opportunity to discuss the EU-IMF programme and the Government's national recovery plan in the House. The two, of course, are inextricably linked. As was outlined earlier, the provision of €85 billion of international financial support to Ireland is on the basis of a specified programme, the details of which closely reflect the key objectives set out in the national recovery plan that was published last week. As Minister for Enterprise, Trade and Innovation, I will focus my contribution on the areas of the plan that are most pertinent to our enterprise sector.

The plan has three critical factors. First, it provides certainty. It is an extensive document containing a detailed set of measures which will put the public finances in order, drive growth and support employment. Having read the plan thoroughly, one could not fail to be absolutely clear about the nature of the task facing us, the strengths we bring to that task and the actions we will take to achieve stability and growth. Second, the plan solidly establishes the credibility of our proposed actions as a Government and as a people. The plan has been endorsed by our international colleagues as a credible and appropriate set of actions to make the necessary savings of €15 billion and reach the broadly accepted deficit target of 3% of GDP. By introducing this plan, we have presented to the domestic and international audience a credible set of actions to bring us to where Ireland needs and wants to be. Third, our national recovery plan represents confirmation of our objective: enterprise- and export-led growth. As Minister for Enterprise, Trade and Innovation, I especially welcome the acknowledgment of and consequent commitment and investment to the enterprise sector. The capital investment of almost €2.2 billion in the enterprise sector and the maximum support and protection afforded to businesses throughout the plan are important, as are the measures to tackle high input costs for businesses, actions to remove barriers to employment, and enhanced job creation measures. All of these are, appropriately, included in the plan.

In addition to the benefits from improved infrastructure and the direct employment from construction, the new four year capital expenditure programme recognises the critical importance of the work supported by my Department and its agencies in achieving economic growth. This is obvious from the allocation of €2.2 billion to enterprise over the next four years.

I often hear people asking from where the investment, growth and jobs will come. The multi-billion euro investment by the Government in this plan means we will continue to win foreign direct investment, increase indigenous exports and tourist numbers, further our smart economy objectives and, most importantly, create 300,000 new jobs by 2016. It is expected that unemployment will fall to below 10% by 2014. Today we have further cause for optimism regarding growth, trade and employment. Activity in the manufacturing sector was steady in November, with output and the number of new orders rising. The NCB purchasing managers' index is rising, with new business boosted by a strong increase in new export orders.

New figures for redundancy claims in the first 11 months of the year show a drop of nearly 17,000, or 23%, on the number filed for the same period last year. Today's live register numbers show the lowest monthly total since December 2009. Although the live register has risen in November in each of the past five years, in 2010 we have seen the first fall since 2004 and the largest fall since 1999. The numbers are almost 42,000 lower than at the end of August. This is further evidence that the live register numbers are stabilising and that our targeted investment in growth to date is working, although there is still much to be done.

We will continue to invest for further growth under this plan. The IDA Ireland investment to embed, transform and increase the foreign direct investment base in Ireland in support of jobs and exports has been completely protected. The total sales of the companies concerned were €119 billion in 2009, while the value added by these firms was equivalent to more than 47% of GNP. Enterprise Ireland will receive a 7% increase in its capital allocation for activity in the area of science, technology and innovation. This increased funding will be used to put Irish companies ahead by enabling them to develop the important competitive advantages that innovation will deliver.

Under the plan, we will make multi-million euro investments to encourage collaboration between industry and third level institutions. This will include the allocation of nearly €8 million to create new high-tech competence centres that will undertake an industry-led research agenda. The target is to double the number of competence centres to 16 by 2015. The increased allocation to Science Foundation Ireland in 2011 sends a strong message, nationally and internationally, that the Government's focus is on driving the smart economy. This investment has been critical to the IDA's capacity to secure research and development investments, currently running at €500 million every year. The allocation will allow the commencement in 2011 of the projects approved under cycle 5 of the programme for research in third level institutions. It also supports indigenous companies that are reliant on knowledge for growth and job creation.

In addition to the significant investment in growth, jobs and innovation under the plan, it also sets out clear measures to improve our competitiveness further. These measures will reduce energy costs and drive down waste and transport costs. Under the plan we are committed to appropriate State investment in next-generation broadband where the market fails to deliver. There is also a series of actions to reduce the cost of professional services. Property costs will face increased downward pressure. With regard to Government-influenced costs, we will extend the 15-day prompt payment rule to the wider public sector, avoid increases in administrative charges, and fully examine the scope for reductions.

Since 2007, measures we have implemented have saved small firms almost €53 million in red tape overheads. We will expedite work to achieve the targeted 25% reduction in the regulatory burden on business, and we will minimise local authority charges based on the local government efficiency review group. Regarding labour costs, we will reduce the minimum wage by €1 per hour. I note that Fine Gael has signalled its intention to reverse this proposal, if it has the chance to do so. That would involve completely ignoring the research, which shows that a reduction in the minimum wage would result in an increase in employment in the medium term. It would also involve completely ignoring the needs of the sectors where the wage is most concentrated. We will review the other sectoral pay agreements including employment regulation orders, EROs, and registered employment agreements, REAs. I am determined to reform any agreement that constitutes another form of labour market rigidity by preventing wage levels from adjusting.

I welcome the labour activation measures set out in the plan. We have already provided 165,000 places this year to train and provide work experience for the unemployed. The enhancements in the plan are an important element of our overall approach to recovery and growth and will further ensure the proper functioning of our competitive labour market.

The plan has been especially successful in balancing new taxation measures. While taxation will contribute €5 billion to the overall €15 billion adjustment, this will be done in a manner least harmful to enterprise. Our competitive 12.5% corporation tax rate will not change. Our marginal tax rates will not disimprove and our tax wedge will continue to remain competitive.

The EU IMF programme and the linked national recovery plan are an important part of Ireland's path to growth. In addition to the upcoming budget, I urge Members to examine closely what it contains and to consider the certainty, credibility and hope it offers and to base to any assessment on these facts rather than short-term political considerations.

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