Martin Mansergh (Tipperary South, Fianna Fail)

I move amendment No.1:

To delete all words after "Dáil Éireann" and substitute the following:

"commends the very substantial investment in infrastructure the Government has already made under the NDP; and

notes in particular the enormous progress made by the Government in enhancing our national road infrastructure and in developing our public transport networks and infrastructure;

notes and commends:

— the Government's actions over the past 10 months to stabilise our public finances, the cumulative effect of which has been to rein in the deficit from a probable 15% to 10.75% of GDP;

— the Government's commitment to supporting the financial system in Ireland since the global financial crisis began last autumn and further commends the Government for its decisions to establish a National Asset Management Agency to clean up the banks' balance sheets and enable them to resume lending to the real economy;

— the Government's initiative in entering into discussions with the pension industry to seek its participation in the financing of public infrastructure projects;

— the Government's commitment to maintaining a pro-enterprise and competitive taxation system, specifically the enhancement in the October budget of our research and development tax credit regime and our introduction of a scheme of tax relief for the acquisition of intangible assets, including intellectual property with a view to attracting high quality employment to this economy;

— the Government's investment in our enterprise infrastructure and the Government's commitment to investing in building a world class science, innovation and technology sector in Ireland;

— the Government's substantial investment in our education infrastructure, particularly primary and secondary schools but also our higher education sector;

— the €30 billion investment plans from our state companies involved in the energy sector and the resulting 3,700 jobs that the ESB recently announced;

— the planned €600 million investment by EirGrid in a new East-West Interconnector and the €4 billion development plans that the company has set out in its 'Grid 25' strategy;

— the additional funding allocated to the home energy saving scheme and other energy insulation scheme in our latest budget and the estimated 4,000 jobs that will result from these stimulus measures;

— the recent Memorandum of Understanding that the Government signed with the Renault and Nissan motor companies and the ESB, and the opportunity this affords Ireland to become one of the leading countries in the world for the rollout of sustainable transport systems;

— the Government's substantial investment in enhancing our environmental services infrastructure which will not only support future business investment but also enhance the environment we live in; and

— the Government's very significant and ongoing investment in social infrastructure, particularly in regard to housing and our health services;

notes:

— the increase in broadband provision from 500,000 households in early 2007 to 1.2 million households today; this uptake is supported by an estimated €770 million annual investment that has been spent by companies in the competitive marketplace in recent years; and

— the ongoing investment by the State in rural broadband infrastructure through the National Broadband Scheme, our schools broadband scheme and the range of measures including a One-Stop Shop to access state-owned fibre ducting as set out in the Government's Next Generation Broadband policy paper;

notes with approval the Government's very substantial capital investment programme from 2009, notwithstanding the severe budgetary challenges that face us; and

invites the Government to continue to invest as planned in those infrastructure priorities that will ensure economic recovery far better than other untested, un-costed and undeveloped proposals."

I am pleased to have the opportunity to take part in this debate and to highlight the decisive measures and actions the Government has taken to address our current economic challenges. It is worthwhile highlighting the spectacular and highly visible progress that has been made in public infrastructure in recent years.

Some on the Opposition benches want to air brush out of history the substantial achievements we have made in the past 12 years under this Government and its predecessors. However, travelling throughout the State, particularly on some of our new and enhanced transport infrastructure, reveals a country transformed. Some of us have half forgotten where we were ten or 20 years ago. Some of us have forgotten the advances Ireland made in moving towards European levels of prosperity and infrastructure provision. It is true that we are facing into severe budgetary and economic challenges. However, we are doing so from a much higher plateau of development than in the past. The investments we have made and will continue to make under the national development plan will help Ireland to cope with its economic difficulties and will position us to avail of an international economic upswing.

A global economic recovery will come but it is too early to say when that will be. In the meantime, we will not allow ourselves to be paralysed into inactivity. The Government has taken firm and decisive action to address the multiplicity of challenges which confront Ireland. Some of these decisions are unpopular but unavoidable. If the Government had failed to take firm and cohesive measures in the past ten months or so, we can be certain the situation would now be far worse. The deep contraction in economic growth that we are experiencing has had very negative consequences for the public finances. Without the actions taken in the recent supplementary budget, the general Government deficit would have been 12.75% of GDP this year, reflecting the large gap needed to fund the difference between spending and revenue. This would have represented a further substantial deterioration from the deficit of 7% of GDP recorded in 2008 and from the surpluses recorded in ten of the 11 years up to 2007.

The Government is determined to take whatever actions are necessary to bring back sustainability to the public finances. Last July, we took a series of expenditure measures which will yield savings of €1 billion this year. The October budget delivered further strict containment of expenditure along with revenue-raising measures designed to yield an additional €2 billion. Earlier this year, the Government reduced public expenditure by €1.8 billion, primarily through the introduction of the pension related deduction. Measures announced in the supplementary budget will result in a further reduction of nearly €1.5 billion in gross public expenditure and additional revenue of €1.8 billion. However, the deterioration in tax revenues from €47.25 billion in 2007 to an envisaged €34.5 billion this year highlights the scale of the challenge we face. A difficult balance is now necessary between the need to show a credible route to restore order to the public finances and the need to protect our economy as far as we can this year. The Government decided that this balance was best achieved through a borrowing target of 10%.

While we cannot control developments abroad, we can take decisive actions to put our economy on the road to renewal and to demonstrate that we have the capacity to make the right choices for everyone in the State. The supplementary budget set out further details of a five-year plan to bring the deficit back to the agreed 3% limit by 2013. This budget demonstrated that the Government is taking the necessary difficult decisions to underpin the stability of the public finances and thereby sustain future economic growth.

For almost two years, the banking and financial sector has been at the centre of a storm and seldom out of the public eye. The banking system is unique and its proper functioning is critical to the smooth running of the economy. The Government's approach to this unprecedented crisis in global financial markets has been structured and considered and has had regard to agreed principles at European Union level. The Government introduced the bank guarantee scheme to ensure banks could access funds as required. It also introduced a recapitalisation programme for our two major banks, Allied Irish Banks and Bank of Ireland, nationalised Anglo Irish Bank to ensure the stability of the financial system, and proposes to put in place a State guarantee for the future issuance of debt securities with a maturity of up to five years.

However, further action was needed. On budget day, the Minister for Finance announced the Government's plan to establish a national asset management agency, NAMA. The objective of this agency is to strengthen the banks' balance sheets, reduce considerably uncertainty over bad debts and, as a consequence, ensure the flow of credit on a commercial basis to the real economy, thus protecting and growing employment while maximising and protecting the interest of taxpayers. We must ensure householders can access credit for home loans and consumer spending, that small and medium-sized businesses can fund their enterprises, that deposit holders have confidence their money is secure and protected and that international investors are satisfied as to the stability of our banking system. Removing these risky assets from the balance sheets of the banks is the way to do this.

The Government has shown in both its recent budgets in October 2008 and April 2009 that despite the need to secure substantial increases in tax revenue, it remains committed to maintaining and enhancing pro-employment business tax reliefs. In budget 2009 and the subsequent Finance Act, the Minister for Finance introduced a considerable enhancement to our research and development tax credit regime. Measures were included to increase the rate of tax credit for research and development expenditure from 20% to 25%; allow for the carry-back of unused tax credits for set-off against corporation tax paid the previous year and for any remaining unused tax credit to be refunded over a three-year period; set 2003 as the permanent base year against which to measure incremental research and development expenditure for the purpose of the tax credit; and allow a proportion of the expenditure on new or refurbished buildings to be used in part for research and development purposes to qualify for the tax credit, thus recognising that much research and development takes place outside traditional laboratories.

In his Budget Statement of 7 April this year, the Minister for Finance mentioned the increased importance globally of intellectual property. The budget included a proposal 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 will be published in the legislation giving effect to the budget provisions on 7 May. This measure will help to attract high-quality employment.

Measures to stabilise the public finances, support the financial sector and maintain a business-friendly tax environment provide the essential framework for economic recovery. Also important is a targeted infrastructure investment programme, addressing in particular those infrastructure deficits which would constrain economic development. The National Development Plan 2007-13 sets out a comprehensive framework for delivering public infrastructure. Much has already been achieved and significant investment will continue up to the end of the plan in 2013.

Government investment in infrastructure is most clearly evident in transport. The transport networks here are being transformed. We now see a network of motorway standard taking final shape, giving us world class road links from Dublin to our principal gateway cities. Already for some time, a motorway to the Border is in full operation. Intensive work to fill the remaining gaps between Dublin and Cork, Galway, Limerick and Waterford is visibly advancing. Completion of this network and the synergies it will bring will of themselves be powerful contributors to economic recovery all round the country.

Public transport has also been the beneficiary of a very substantial investment programme in recent years, the most substantial in the history of the State. In the greater Dublin area, we can see the benefits of investment in commuter services like the Luas, the DART and other suburban rail connections. Investment is continuing on three more Luas projects as well as work on the Kildare and Navan lines. Investment in the greater Dublin area has been complemented by investment in mainline national rail, with much more frequent services on some lines, particularly between Cork and Dublin, as well as in commuter services like the Cork-Midleton route.

Supporting our enterprise sector in this difficult climate is clearly a priority. In particular, the recently introduced stabilisation fund will provide targeted support to indigenous companies to assist them in the present exceptionally difficult business environment. The stabilisation fund will have a total budget of €100 million over two years. Particular attention will be paid to small and medium- sized enterprises. Companies engaged in exporting will be eligible to apply for assistance. Funding will be provided in a wide variety of forms, but equity injections are most likely to be used in practice. Assistance will be available to companies that meet particular criteria. Enterprise Ireland will also continue its regular supports for indigenous companies in 2009. The total capital funding available to Enterprise Ireland to support industry in 2009, including the stabilisation fund, will be €103 million. Funding for foreign direct investment from IDA Ireland will amount to €70 million in 2009.

The decision by Government to allocate significant levels of funding to science, technology and innovation sends out a signal to the research and development community and to those enterprises looking for a base in which to expand their research and development activities that Ireland is committed to the research and development led smart economy path. That path dictates that a strong science base, matched by a paradigm shift in the capacity of our enterprise sector to create knowledge, to innovate, and to exploit new knowledge across global markets, is critical. Without innovation and even a modest element of research and development, few businesses will grow in today's markets. Innovation will prove commercially successful if it is genuinely customer driven. Commercial success in turn leads to stronger profitability and a stronger enterprise base across the country. Ireland is doing well in innovation. We are above the EU average and are the best improving EU country within our peer group. We performed particularly well in innovation in throughputs, where we are fourth and in human resources and economic effects, in both of which we are in fifth position, in the European Innovation Scoreboard for 2008 published in January.

The work of IDA Ireland, Enterprise Ireland and Science Foundation Ireland, together with the research and development tax credit introduced in the October budget, puts Ireland to the forefront of research and development regimes globally. As well as increasing Ireland's attractiveness as a location for research and development activity, it will provide a stimulus for value added activities. Research and development in Ireland has expanded dramatically in recent years reflecting the Government's massive injection of funding into the sector. In the past five years, IDA client companies have invested €1.31 billion in new research and development activities.

The Government has shown, in its recent supplementary budget allocation, the importance it attaches to energy efficiency. The allocation for Sustainable Energy Ireland's energy efficiency programmes were increased from €44 million in 2008 to €93 million in 2009. Of this, €50 million is for the home energy saving scheme, which will facilitate insulation and energy efficiency works in up to 30,000 private homes and which will also give employment to construction workers. Additional funding of €20 million was also provided to local authorities to improve the energy efficiency of local authority housing.

However, the bulk of our investment in energy continues to be made by the State's energy companies. In 2009, these companies will invest more than €1.8 billion in the electricity and gas network and in power generation, including renewable energy and wind farms. This investment will ensure that we have a modern and efficient energy infrastructure, with improved security of supply.

The substantial investment by the Government in environmental services infrastructure has enhanced the environment for the benefit of all of Ireland's citizens while supporting future business investment. There has been an increase to 95% in the number of group water scheme households in compliance with national drinking water standards at the end of 2008 compared to 85% at the end of 2007. Some €500 million of Exchequer funding in 2009 will be used to continue to upgrade and improve our water and waste management infrastructure, meet ongoing commitments for some 150 schemes in progress under the water services investment programme and provide for continued investment under the rural water programme.

The year 2008 witnessed the continuing development of Ireland's waste recycling infrastructure. A total of 47 waste recycling projects, such as bring banks, civic amenity sites, composting facilities and materials recovery facilities, were in receipt of grant assistance of more than €24 million from the Environment Fund and the Exchequer. Overall municipal waste recovery is now more than 36% compared with just 9% a decade ago.

Some €2.4 billion was directed towards social and affordable housing and improvement and regeneration measures in 2008. This record level of investment, which included Exchequer funding of €1.73 billion, allowed the needs of approximately 19,500 households to be met in 2008 through the full range of social and affordable housing programmes. In the current economic climate, there remains a very significant level of investment by the Government in the delivery of housing supports across a diverse range of needs, with €1.4 billion in Exchequer funding provided in 2009. Within this provision, the Government will attach priority to meeting the needs of the most vulnerable and disadvantaged in society. The use of long term lease arrangements will be key to continuing momentum in meeting social housing need and will take advantage of changed market conditions. The provision of €190 million for regeneration and remedial works projects will allow a number of energy efficiency measures targeted towards improving performance in the social housing stock and a number of regeneration programmes to continue.

Capital investment in the health sector has brought about a significant improvement in the standard of facilities across all care programmes. Government policy aims to maximise the health and social well being of the population. The primary focus is the promotion and protection of the health of the whole population with a particular emphasis on reducing health inequalities and improved recovery rates. A well designed health care environment can lead to faster patient recoveries, reduced suffering for patients and reduced risks of infection.

In this House, all sides share the common ambition of seeing Ireland successfully emerge from its current difficulties. I commend Deputy Coveney for putting forward proposals for debate. However, there is a world of difference between aspirations and having to devise hard headed, practical solutions.

Turning to the proposals in the Opposition motion, I am not satisfied that they are thoroughly thought through. They are very aspirational. The job numbers proposed are unsubstantiated; 100,000 jobs is a very round number. This type of promise is reminiscent of a previous era in politics, where politicians made dramatic promises about precisely how many jobs their policies would create in a specific timeframe.

See this speech in context