Joan Burton (Dublin West, Labour)

This year's Finance Bill is a product of a Government which has run out of ideas about how to restore the economy, get people back to work, get business moving or get credit flowing from the banks. This Finance Bill, which should mark a turning point in our economic fortunes, is devoid of any real economic plan. The Government remains locked in denial about the failure of its banking strategy, in particular in respect of NAMA to get credit flowing to businesses and individuals.

Jobs are being lost at the rate of 100 every day. Just today, 750 job losses were announced by Bank of Scotland Ireland which is closing down its Irish retail banking operation. I understand it has put forward proposals to the Minister and I would be interested to hear if he has had the opportunity to examine the proposals it has put forward to salvage at least some of the jobs in that company. Yesterday there were 175 job losses in Galway.

As unemployment crept to more than 435,000, 60,000 people also emigrated. However, Fianna Fáil keeps repeating its mantras that we have turned the corner, that we are on the road to recovery and that the economy has stabilised. Economists around the world have warned of the risks of repeating the mistakes made by the Hoover administration in the USA during the Great Depression, yet this Government seems more intent on following the lead of Hoover rather than Roosevelt.

While the Government has focused almost exclusively on the banks and its deeply flawed NAMA plan, the real economy of indigenous jobs and businesses continues to take a hammering of historic proportions. The Government seems to have a strategy that wage cuts as a substitute for deflation is the only recipe it has to offer. It made €4 billion in cuts in this budget. The parties in Opposition, to support the country's international reputation, loyally gave the Government space to do that. However, the Government has said this is just the first of three such massive reductions. Although we gave the Government that space, nothing has been done by it in regard to job retention or job creation.

Once again the Finance Bill has little or nothing to offer in the way of a jobs stimulus or confident return to growth. Once again, the centre piece of the Bill is a series of new tax exemptions for the IFSC, which have been neither costed nor set out in detail, as was promised consequent to tax scandal after tax scandal. The Government is saying the same thing, namely, "Trust us, and here is a whole bag of tax exemptions and tax reliefs which we will not explain, cost or set out in detail". To hear the Taoiseach speak, one would think global finance and offshore banking is to be to the recovery in Ireland what the property bubble was to growth during the Celtic tiger. He is seriously misled in that respect.

Last night I attended a lecture given by Dr. Craig Barrett on the importance of investing in education, science, research and development. It was interesting to note that Dr. Barrett, who is the former chairman of Intel, said that we in this country had to move from being average to being excellent. He said we went around the world boasting that we were in the top percentage of income, but if one examines our performance in critical areas such as education in mathematic and science one will find that instead of our performance being excellent, as our income levels would dictate, the Government has brought us down to a miserable average in a country which is famous around the world for its commitment to education. The Government, over its years in office, has reduced us to being average and not excellent in one of the areas in which Ireland has shone historically, in terms of its commitment to education and a whole generation of people who excelled in education, research and the sciences.

Dr. Barrett last night warned that the future lies in indigenous start-ups, using smart people and ideas and, above all, an environment conducive to innovation. What is this Government offering? It is offering massive support to the banks and very considered support to off-shore banking. What is in the Finance Bill for indigenous start-ups? What is in it for the thousands of those with PhDs who were coaxed back to Ireland by various scientific and research programmes, many of whom are in their 30s with young families, who bought houses at the height of the boom and who now, in many cases, will leave Ireland? When such people leave Ireland this time they will not return again. They can be burned once but not twice by this Government. That is the real loss caused by the kind of fumbling this Government has done regarding economic strategy and policy.

Dr. Barrett also said Ireland can no longer depend on inward flows of foreign direct investment. He is the former chairman of Intel, which carries out a rigorous procedure regarding the location of future investments on a ten to 15 year cycle. It was a clear and present warning from somebody who is a world expert on Intel locating in Israel versus Ireland versus Costa Rica and all of the different countries which are competing. He said there was a time when, on the 20 or so headings used by Intel, we were competitive on almost all of them, but we are now only competitive on the tax rate unless we decide to go back to growing the smart economy.

The Government seems to be all at sea on this matter. It does not seem to have any scientists, mathematicians or economists in its number who could come to grips with what the dilemma facing this country is. It has pseudo solutions which will not do very much for many people in this country.

For many ordinary families and businesses this Finance Bill means they will face additional charges on VAT, as it is applied by the Minister to a range of local authority services. He proposes to extend VAT charges, on foot of court judgments and European Union decisions, on services supplied by public bodies, including county councils, such as waste collection, recycling, off-street parking, toll roads and the operation of leisure facilities. Depending on the VAT rate charged for equivalent private services, local authority services will now attract a VAT rate of between 13.5% and 21%. This is a double whammy, in terms of service charges such as waste collection for ordinary families because the Bill will abolish income tax relief on those charges from next year.

In the December budget the Minister told us high earners must pay their fair share - it was one of the headings in his Budget Statement. However, as Minister he has side-stepped many of the reforms proposed by the Commission on Taxation, in terms of restricting tax avoidance measures used by the super rich to minimise their tax bills. For example, he has done nothing to curtail tax relief on investments in private hospitals which are now, in many cases, surplus capacity to what the country needs or can afford. He has not restricted mega pension pots.

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