Mary O'Rourke (Longford-Westmeath, Fianna Fail)

I thank my colleague, Deputy Michael Ahern, for sharing time. I am pleased to contribute to the Second Stage debate on the balanced Bill produced by the Minister for Finance. It is balanced in that the less well-off are looked after while a penalty is imposed on those who earn a substantial income. What will become of all the moaning Minnies, both here and outside the House, who used the budget as a platform to espouse their cause and point out what the Government was doing wrong? How will they cope now that the new proposals have been implemented, thus removing an essential plank in their armoury?

I welcome sections 30 and 31 of the Bill, which deal with the enhancement of the tax credits for research and development. There is no doubt that the research and development tax credit should be the tax policy instrument of choice for the Government over the next decade. The knowledge economy of the 21st century requires us to attract in new "Web 2.0" companies in the same way as we attracted major pharmaceutical and technology companies over the last 20 years. Companies that win in the 21st century will be those whose intellectual capital is their stock in trade. The ability of companies to convert their unutilised research and development tax credits into cash will be a welcome bonus for start up companies, but also for companies that are making a heavy investment in this country.

There is no doubt the changes proposed in this Bill would propel Ireland to the forefront of locations for research and development in the global corporate world. Allied to the work of Science Foundation Ireland — I join in the praise of Dr. Cunningham, who has ensured that Dublin will become the European city of science in 2012 — and the excellent third and fourth level graduates produced by our universities and third level institutions, we have an opportunity to capture the next wave of economic development in the same way we did in the 1980s and the 1990s. I have read nothing but praise for those proposed changes and I am sure they are welcomed by all Members of this House.

I also welcome the changes to encourage businesses in Ireland, especially the relief from tax for certain start-up companies, which is contained in section 27. We have heard very little about this. Small businesses creating three or four jobs will significantly help to turn the economy around at a local level. This section will provide relief from tax for new companies beginning to trade in 2009, where profits are under €40,000 and marginal relief where profits are up to €60,000 over the next three years. It will remove this particular burden from such companies at their formative stage. Small companies always feel the burden at the beginning and their owners often wonder will anybody listen to them and come to their aid. The owners of three small companies contacted me and said this is the one measure that has made up their minds to develop their ideas for a business. This change in the Bill recognises one inescapable truth. If we are to improve our economic position and rise from the current malaise, the corporate sector will have to lead the way, providing jobs and generating revenues in the economy.

I welcome the changes to the so called "Cinderella" income tax provisions. I know that it is a matter of perception rather than reality, but it is a very important perception. I have listened for years to moaning Minnies moaning about the "Cinderella" income tax provisions. I am delighted that they have been addressed in this Bill. These changes are designed to ensure that those who avail of the benefits of living here and are often citizens of the State, should make a contribution when they spend substantial periods of time in Ireland. At a time when we are all being asked to do our patriotic duty, those citizens who have done extremely well but prefer not to contribute to the tax take of the economy, should pay their fair share. That is why I said that the "Cinderella" clause was an issue of perception rather than anything else, especially the mechanism of it. The time spent in the country was measured up until midnight, hence the nickname of the clause.

The Finance Bill 2008 should be recognised in this House for what it is, namely, a well-formed, comprehensive finance measure that takes from those who can afford to give, encourages small businesses, and has looked at where Ireland should now position itself for research and development. The Taoiseach has always placed great emphasis on the fourth level of education, such as PhDs, Master's degrees and specialisations. I am always amazed to meet young people who are doing a PhD in some particular aspect of their primary degree. I always congratulate them. They will be the people on whom this country and its citizens will rely in the future.

We had a great idea in the 1980s, and I do not think that a previous Taoiseach received enough acclaim for his idea on the financial services centre. I remember those years between 1983 and 1987 when we were in Opposition and that measure was developed. It was developed during a great economic depression. There seemed to be no chance of getting out of it, yet the ideas were formed then about the financial services industry and what it would mean if we could get it going. It mattered much to Irish people that we got so many high-end jobs into the country. The measures on research and development in this Bill will have the exact same effect, and I hope that in the next few years, those measures will be an added allure to Ireland when it shows the world what it has to offer. Small countries can punch above their weight, and that is what we will be doing in this instance.

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