Brian Cowen (Laois-Offaly, Fianna Fail)

All of these developments will support new services and better patient care, at the highest international standards, and continue the progress we are making in improving outcomes for patients.

Other key investment priorities will be science, technology and innovation, the promotion of environmental sustainability and the implementation of green enterprise initiatives. All of these initiatives will help to drive productivity improvements. Within this envelope, we are reallocating funds to provide an immediate stimulus in several key areas.

A new national energy retrofit programme will create an efficiency fund to stimulate investments in energy efficiency and greenhouse gas mitigation. We are allocating €130 million for energy efficiency programmes in 2010. The scheme will also focus on providing information, via the utilities, to all households on the possibilities of reducing their building energy rating, BER. This way, the grant investment will leverage further investment from higher-income households. The carbon tax will provide a further incentive, as will the impact of an improved BER on house values. This will, in time, allow more funds to be targeted at fuel poor households and the elderly. Some €90 million will be allocated directly to the programme in 2010 with a substantial proportion of the funds ring-fenced for those suffering from fuel poverty. This will be augmented by approximately €125 million in private investment. We expect this to result in 60,000 homes and several hundred commercial and public sector buildings being upgraded in 2010.

The programme will provide an estimated economic dividend of more than €400 million net benefit to the economy in 2010; an employment dividend of around 5,000 jobs next year; a health dividend in that warmer homes will reduce deaths and illness from cardiovascular and respiratory diseases, which have a particularly negative effect on the elderly; a fuel poverty reduction dividend; and an environmental dividend of CO2 savings of 115,000 tonnes per annum, which will assist Ireland in meeting its greenhouse gas reduction targets. In addition, a scheme of accelerated capital allowances for energy efficient equipment is being enhanced. This will improve energy efficiency and help companies under competitive pressure, such as food and drink, retailing and distribution businesses.

We have introduced a 12-month car scrappage scheme from January 2010. Subject to conditions, VRT relief of up to €1,500 per new car purchased will be made available under the scheme, where a car of 10 years or over is scrapped. It is estimated that this will safeguard approximately 2,000 jobs and provide a net benefit to the State in terms of tax revenue and reduced social welfare of between €30 million and €100 million. Moreover, it will provide a significant net environmental dividend in terms of reduced CO2 emissions, assisting Ireland to meet its international obligations regarding climate change.

To assist the retail sector in competing with the sterling area, we are reducing excise duties on alcohol and are reversing the 0.5% increase in VAT imposed in October 2008. The British Government has confirmed that it will raise its VAT rate by 2.5% from January next.

The tourism sector, which is employment intensive, has been under great pressure as a result of the global downturn. Investment in visitor attractions will be increased three-fold to €22 million, and the overall tourism budget is being increased in 2010 to enable a marketing drive to increase tourist numbers and revenue by 3%.

We continue to be committed to the agriculture sector as a vital part of the economy. We have made a large investment in agricultural infrastructure through the farm waste management scheme. We are committed to supporting an environmentally-friendly agriculture sector, and are in discussions with the European Commission with a view to introducing a new five-year agri-environmental scheme. We have re-allocated €50 million for this scheme. We are also providing €120 million for forestry and bio-energy.

Central to our smart economy vision is that Ireland will become an innovation hub, a country that is an attractive home for innovative multinationals as well as being an incubation environment for the best entrepreneurs at home, from Europe and further afield. We must get more for less across all sectors of the economy, public and private.

We are continuing to invest heavily in research and development and are establishing a single funding stream for the strategy for science, technology and innovation to maximise the efficiency and focus of our investment and ensure that Ireland's effort is strategically targeted on those areas where we can achieve greatest impact, including through close alignment with industry needs and a strong commercialisation effort.

As a first step, it will involve combining the funds currently administered by Science Foundation Ireland, research funds administered by the HEA, the research funding of the HRB and, as appropriate, funds related to research calls of sectoral Departments. We will retain and enhance the significant incentives we introduced in the past two years in research and development and the intellectual property environment. We have committed to retaining the 12.5% corporation tax rate and we are extending to new company start-ups in 2010 the three-year corporate and capital tax exemption.

We are retaining the patent royalty exemption, which is an important support for research and development intensive indigenous and multinational companies. The Government looks forward to receiving the report of the innovation taskforce on its recommendations in regard to further measures for creating a positive environment for entrepreneurship, innovation and intellectual property and the Minister for Finance has committed to considering these in the context of the Finance Bill.

We are establishing a credit review system to ensure a flow of credit from the banks to support healthy Irish businesses and jobs. In a small open, economy like ours, we must trade to thrive. That is how we will protect existing jobs and create new jobs. The Government will continue to support the enterprise sector as it adjusts to the severe competitive pressures it currently faces, in particular, from currency movements against our main trading partner, Britain.

Much of our effort in the past year has been on stabilising the economy, with short-term measures to help business survive and support those who lose their jobs. We have already introduced a range of measures to support firms through the crisis including the enterprise stabilisation fund, the temporary employment subsidy scheme and interventions to apply downward pressure to energy costs. We are also introducing a new employer PRSI exemption for new employees, which will reduce the cost of creating new jobs, helping to get the economy moving again.

This budget is the start of a new phase where we begin to create sustainable jobs as the global economy begins to pick-up. Last week, we published a report showing how we could create 80,000 new jobs in green enterprise in the coming years. It contains proposals for green enterprise zones, renewable energy and a green IFSC. The innovation taskforce is developing ideas for job creation by making Ireland the best location in Europe to start a high potential innovative company.

We already have one of the best concentrations of high-tech multinationals in Ireland. Our plan is to incentivise them to invest further in high-value research and development areas, and in the convergence of technologies that provide well-paid jobs that will stay in Ireland. We will publish a new action plan on trade and investment early in 2010, prioritising our links with new and fast-growing markets in Asia and elsewhere. We will continue to pursue new opportunities in international services, including financial services. Following the budget, through the Cabinet committee on economic renewal, I will drive forward our efforts in all these sectors, ensuring that all Ministers, Departments and agencies prioritise these opportunities so we can get people back to work as quickly as possible.

The recent floods have further underlined the necessity of building better flood defences, where appropriate, and undertaking other non-structural measures to mitigate the risk of flooding. An increased allocation of €50 million has been provided, so that planned works in a number of towns can be completed, new risks addressed and better warning systems put in place, with a particular focus on some of the worst affected areas, including Cork, Galway and the Shannon, Lee and Liffey river catchment areas

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