Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

We have been through an absolute economic tsunami. If the value of everything in the economy goes down by 20%, as it did with GDP, this then transfers over in the closure of many small businesses, particularly on the retail side. It is beginning to restore again, particularly in Dublin. One sees businesses reopening or starting up. I hope we are at the start of a more optimistic cycle. Not everything is repaired, however.

As well as being involved in the troika programme, we have taken the economy sector by sector with a series of initiatives where we have restored tourism, agrifood and farming, in which we have enhanced inward investment and the financial services. We are also repairing building, development and construction. It is just tipping in the right direction but it has been very difficult. We have had to do a big repair job on banking. Retail is really a function of consumer sentiment. The retail figures for the first three months of 2014 have been at their highest for several years. We hope this will continue.

It is also true that while volume is up in retail, the VAT receipts show there is much discounting in the sector. One will know from walking any high street that there are sales all the time with discounts of up to 50%.

On the strategy of how the tax code influences consumer spending, we moved to a property tax because it is set on fixed assets. We made a commitment that we would not increase income tax. It is income tax that generates consumer spending, helps retail and, in turn, creates jobs. We have been following the Deputy’s advice. The problem is we had to do this when we were consolidating to move back from the brink of impending bankruptcy. We have made much progress but I am the first to admit that it is still work in progress and much more has to be done over the next two years.