John McGuinness (Carlow-Kilkenny, Fianna Fail)

This morning Peter Sutherland made an important contribution in the context of the debate on where we are going. He said that Ireland's economy is not the basket case that is being presented at home and abroad. He went on to say that we have a major budget deficit problem and we know the difficulties of getting out that are considerable and much pain will be involved. He acknowledged that our industries are basically modern - associated with pharmaceuticals, information technology and services, which is a strength, and that in many ways the Irish economy was very resilient. That was Peter Sutherland speaking and not anyone from the Fianna Fáil benches, including me or any other Minister. That is very important because it feeds into our international credibility and what we have been trying to do in the context of the budget. It puts it in place in a non-political way. It allows us either to debate that approach to politics and the economy or to be locked into the narrow view that was presented in Deputy Kenny's comments.

I prefer to view my glass as being half full. I prefer to look at the positive aspects of what we are trying to do in a very difficult time. In doing that a number of weeks ago I suggested in the course of another debate that we should have a property bank or an asset management bank. I am very pleased to welcome what the Minister for Finance has done regarding the property assets held by our banks. I hope we can quickly establish the agency to look after this and to move it on. I do not welcome it on the basis that it is a good thing for the banks or the well off - sometimes described as the fat cats. I do it on the basis that we need a sound financial structure. We need to release the banks from their present position. We need to encourage them to begin to do business all over again in a way that will support the SME sector, the micro sector and businesses generally so that they in turn can create the jobs and complete the projects in which they were engaged to encourage employment.

If we are to get out of this we need to create jobs. Creating those jobs and creating exports will give us the best advantage when the upturn comes. To do all of that for the citizens of this country and not only for the well off we need to create the type of management structure for that agency as outlined by the Minister for Finance. As I said in the course of a debate last week, the SME sector and the micro sector are almost being prevented from doing business because the banks will not lend money. They are so unsure about their own asset base and the values of the properties they hold at present that they are not doing business as they should be.

The fear experienced by those in business and those employed by enterprise should be removed by giving the banks the opportunity to do that business in every parish in the country. While we establish this agency, businesses must continue to operate, trying to deal with their overdrafts and the cost of doing business. I hope the agency will be established quickly to prevent further damage to the business sector resulting in further job losses because businesses are finding it difficult to manage and to get funding from the banks.

It is necessary also to examine the cost of doing business here. This budget goes some way towards dealing with that cost but we need to do much more and to be specific about it. As much as I want the Government to tell the banks to open up and do business, I want it to tell organisations such as the ESB directly to reduce their costs by at least 25%. That is essential if we are to do business.

The Government needs Departments that reflect the reality of business. They should be able to respond quickly and deal with the issues of the day in a way that allows business to be done. When the Irish Financial Services Centre was established every roadblock was removed to ensure it could do business and that Ireland could take its place in that sector as quickly as possible. That can continue to grow if Government has the right infrastructure to reflect what is needed.

I have not seen a speech so badly quoted as the one I made about the public sector last September. Members of the Opposition have quoted it at public meetings, out of context and wrongly. Members of this House have misquoted it to poke fun at others. In that speech I acknowledged those who do a good job in the public sector, and that the frontline services act almost as a band aid for a sector that is not able to function because the culture and management systems need to be modernised and freed up to allow real participation by the individuals that help to make the country work daily.

Reform does not involve taking a chunk of people out of a sector and jobs. It involves creating the systems and management that allow them to function in a modern economy that is challenged as this one is. It involves examining procurement across the public sector, how we do business, freeing that from EU regulations. We need to tailor the cloth to suit our measure because within procurement there is an industry worth many millions, if not billions, of euro that can support and help to develop the SME sector, which is not allowed under EU regulation. I am delighted that the Minister of State at the Department of Finance, Deputy Mansergh, is involved in the reform package in that area and that small businesses will be allowed to engage with local and national government, and other organisations or State agencies, to get the business they require so that we can stand over a developing SME sector which can get business from Government or State agencies and provide value for money.

The smart economy involves reducing costs and bureaucratic structures and having a light regulatory hand on business while regulating the banks to make them answerable and more accountable than they have been over the past 12 years. It involves deciding whether to accelerate the development of wind and wave energy or nuclear power and deciding what policies are necessary to ensure that we get new thinking, value for money and apply best practice and technology in that area to reduce the cost of doing business. That will ensure that Irish businesses grow and prosper, being supported by a county enterprise board system which has proved its value. In the face of the present economic challenge they will prove their value even more. Small businesses should engage with the enterprise boards to examine how their goods and services can be commercialised and internationalised. As we fund research and development of large multi-million euro projects we should examine how to commercialise the results so that companies can be created to bring those products and services to international markets, thereby creating jobs.

We need to reward the patience of the public that we represent by bringing about real reform and engaging with it to ensure that it receives an active response when it comes to any agency, Department or this House. The public will then see the changes we want to bring about that are so necessary for modern Ireland as we develop structures in a new world trade and a differently regulated global economy. The public's general acceptance of this supplementary budget, which is difficult for families and others, including businesses, who must pay more, will appreciate it better if its outcome provides value for the taxes invested. It will support the changes we are trying to bring about if it sees systems with which it can engage.

The tax base adjustment for intellectual property is essential for the next steps in developing a knowledge-based economy. Every region should be closely linked to business and academia and there should perhaps be a centre of excellence similar to the Irish Financial Services Centre. This could encourage research and development and attract large international companies. That would put Ireland at the front of the knowledge-based economy, with research and development, and create new jobs associated with the pharmaceutical industry, information technology and functional foods. We need to use the foundation created by the supplementary budget to create an enterprising nation. This is vital for our future.

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