Brian Lenihan Jnr (Dublin West, Fianna Fail)

Enterprise Stabilisation Fund The Government can help with the process of supporting employment by a redirecting of the NDP to support employment and enterprise. The broad cost of each thousand people who lose their jobs is now estimated at about €21 million. In order to support employment, the Tánaiste and Minister for Enterprise, Trade and Employment will set up an enterprise stabilisation fund worth €100 million over two years. In conjunction with the banking sector this fund will provide direct financial support to eligible, internationally-trading enterprises.

Smart Economy

The Government will also implement measures to support the smart economy through investment and incentives to reach a research and development target of 2.5% of GNP by 2013. We have already trebled our economy-wide R&D spend in the last decade. It is now about €2.5 billion of which some two thirds comes from the enterprise sector. It is not just a matter of saving jobs where we can but of re-orienting the economy to produce the export-led growth we must achieve.

Activation through Training, Education and Work/Employment Experience

Increased unemployment carries a heavy human cost for individuals and families and threatens the aspirations of all our citizens. We must support those who have lost their jobs through re-training and further education. As an initial response, the Government has already introduced a number of measures in these areas.

Notwithstanding the pressures on the public finances, I am now announcing a further range of activation measures which will achieve the following: support individual enterprise through enhanced access to the back to work enterprise allowance scheme, which will facilitate some 1,400 additional claims; encourage further education through earlier eligibility for the back to education allowance; facilitate work experience through a new scheme, to include placement of graduates, which will cater for 2,000 people; expand activation opportunities for over 14,000 people; support redundant apprentices to receive additional training in the education sector – for up to 700 people; enable participation in further and higher education for over 6,000 people; and initiate pilot training schemes for workers on a three-day week. The Tánaiste, the Minister for Social and Family Affairs, and the Minister for Education and Science will provide details on the initiatives in their respective areas.

The overall cost of this wide range of measures will be met through the re-allocation of current resources towards supporting unemployed people. The full year cost of providing close to 25,000 additional places will be in the order of €128 million. Within available resources, the Government will continue to pursue the introduction of further training and education services.

CONFIDENCE AND STIMULUS

The most effective way to build confidence in this economy is to show that we can restore order to our public finances.

Measures to help Stimulate the Economy

Notwithstanding the increases today, our tax system remains competitive and pro-enterprise in character.

Last October, I introduced a considerable enhancement to our R&D tax credit regime. I also mentioned the increased importance globally of intellectual property. Accordingly, I propose to introduce a scheme of tax relief for the acquisition of intangible assets, including intellectual property as a means of supporting the smart economy. The details of the scheme will be worked on by my Department, in conjunction with the Revenue Commissioners, and will be published in the legislation giving effect to the budget provisions. This measure will help to attract high-quality employment to this economy.

To address the overhang of unsold properties, I am proposing to establish a stamp duty trade-in scheme. This will enable persons purchasing a new house or apartment to trade in their previous property with the seller who will not be liable to stamp duty until they subsequently sell the traded-in property on at a later stage. Full details of this initiative will be contained in the forthcoming Finance Bill and the scheme will apply from the date of publication of the Finance Bill to 31 December 2010. I am also changing the way in which car dealers can account for VAT on second hand cars from July next.

RESTORING OUR REPUTATION

As a small open economy, our reputation abroad matters in terms of our ability to attract foreign investment. Recent banking scandals have sullied our good name and may have prompted some investors to think twice about investing here. Measures presented in this budget send a strong message around the world that we are determined to restore our reputation. The actions I outlined earlier to repair banks' balance sheets and the proposed reforms of our regulatory and supervisory regime are aimed at rebuilding confidence in our financial system. The resolute actions we are taking to reduce the budget deficit and to boost competitiveness by driving down costs, prices and wages are needed to restore the confidence of prospective investors, bankers and lenders. To reinforce these messages, I plan to visit financial capitals around Europe over the coming weeks along with representatives from the National Treasury Management Agency. These visits will give me the opportunity to communicate more effectively with foreign investors about our plan for renewal.

It was only last June when we surprised our EU partners by rejecting the Lisbon treaty. Looking back, it would appear that economic success had fostered a sense of invincibility. A lot has changed since then. Events over the past year have underscored how interdependent the world is and have reminded us that our fortunes are deeply intertwined with those of our European partners. We are a small trading nation on the edge of Europe, but our best interest is served by remaining at the heart of Europe.

CONCLUSION

A Cheann Comhairle, I want to acknowledge the serious and constructive documents put forward by the two main Opposition parties in advance of the budget. Both documents contained some good ideas, some of which we have adopted. While there are many differences between us, there is also some important common ground. That in itself sends out a powerful signal to the rest of the world that we can overcome our difficulties.

As the many interest groups prepare, as is their right and duty, to defend their sectional interests in this budget, I ask them to pause for thought. We are now facing the challenge of this nation's life. This is a time to set aside those narrow, sectional interests. Yes, we must be fair and I believe we have been fair. But now is the time for the common good to prevail.

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