Cyprian Brady (Dublin Central, Fianna Fail)

In this digital age, in recent weeks we have watched events unfold on a daily basis in world financial markets. The global credit crunch is affecting the entire developed world. Rising fuel and food prices and volatility in financial markets is having a negative impact on growth in the United States, the United Kingdom and mainland Europe. The adverse changes in exchange rates and the weakness in sterling and the dollar compared to the euro are also hurting Irish exports and impacting on the real economy.

As a result of the global slowdown, this is the first year in the past 11 years that the tax take, which is the income that accrues to the Government, is larger than Government expenditure. The main reasons for that are external and outside our jurisdiction and control. As a small, open economy we are subject to what happens outside our borders. The stupidity and greed of certain bankers which led to the sub-prime mortgage crisis and increase in foreclosures in the USA has had a major impact on our economy. However, in the budget, we are putting in place measures to help stimulate the economy. We must do this and look forward to where we will be in six months, one year, 18 months and two years' time. Such measures as corporation tax remaining at 12.5% will send a strong message to foreign multinationals wishing to do business, and to maintain business operations, here. Foreign direct investment, FDI, remains strong here and FDI will play a key role in driving the economy in 2009. As the Minister for Finance stated, we continue to attract a disproportionate amount of all foreign direct investment in Europe. We must continue this and take measures to sustain it. As the Minister of State, Deputy Devins, stated earlier, the increase in funds in research and development are welcome and will also help stimulate the economy.

Such measures as the tax credit for research and development will increase from 20% to 25% and will increase Ireland's attractiveness as a location for such activities as it has done in recent times. We are also trying to encourage new and start-up companies here and, in this respect, we have introduced remission in corporation tax and capital gains tax for such companies in their first three years of operation. Despite everything that has been said, this is not about trying to prop up anyone in the economy. This is about creating jobs and keeping them here for the young, well-educated people coming out of schools and colleges and this will continue for some time to come.

I also welcome the reduction in stamp duty on commercial property, as this will help stimulate business activity and lead to job creation. These overall measures will stimulate the economy and will allow us to take advantage of the upturn when it occurs. We examine news around the world every day. Consider how other countries have reacted to the current crisis and the $700 billion bailout plan passed by the congress in the USA and the funds committed by the ECB last weekend. These should help stimulate activity in the global markets and help unfreeze the credit markets which at the moment are suffering a severe lack of liquidity. This, in turn, is making it more difficult for businesses and people here to take out mortgages and loans. In the budget, measures were put in place for first-time buyers which will encourage activity in this area and help such buyers to get onto the property ladder.

For 2009, the Government is allocating over €1.65 billion in Exchequer funding for a range of housing programmes. First-time buyers will now get tax relief at 25% instead of 20%. Many affordable housing schemes in place will now be revamped and a single umbrella system known as the Government equity initiative will be set up. Under this scheme the Government will help people who need affordable housing by providing an equity share and the maximum loan available to people who cannot get financing for a new home will also be increased.

In the budget there is continued investment in infrastructure. Despite the economic downturn, gross expenditure for the Department of Transport in 2009 is €3.613 billion. This is evident in my constituency where there are several projects which are in the planning stage and others which are under way. For instance the metro north project is still in planing and will go to tender in 2010. The Luas extensions will be completed this year and next year. The rail interconnector which is a sizeable plan for the north docks area of Dublin will link into the rail system and progress continues. There is a new signalling system planned for Dublin city and integrated ticketing will come into effect next year. These are all sizable projects that have an ongoing input into how we do business in the city and country. Despite everything, it is commendable that these plans are continuing.

Despite the challenging outlook, there have been large increases in such areas as social welfare and this will continue. Gross current spending will grow by no more than 3.6% in 2009. However, spending on social welfare will grow by 8.4% to €19.6 billion and the education and health sectors will also see an increase.

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