Kieran O'Donnell (Limerick East, Fine Gael)

In the debate of the past half-hour on the budget we heard from the Government which, in my view, is being disingenuous with its figures, basing everything on net rather than gross amounts. Net can be different for different people, depending on their circumstances, the credits for which they qualify and whether they are married or single. The Government appears to have made a decision and is now going back to plug the holes, working from the decision backwards rather than having prepared that decision. The assistant secretary grade has had a 3% reduction but in essence the Government has given a 5% bonus because 8% should have been applied. If one were looking for consistency that is the kind of thing one should look at. If one considers a gross salary that includes average performance-related pay, it appears that bonuses were paid to everyone at different rates but at an average of 10%. If that is the case why not deem it to be salary? One cannot have it both ways.

Regarding the Finance Bill, I refer specifically to the Limerick regeneration project. I brought the matter up earlier with the Taoiseach, saying I would ask the Minister for Finance to consider tabling an amendment to deal with the provision of tax designations for the regeneration areas in Limerick and some adjoining areas to encourage private investment to take place in those areas. In addition, I would like to see the Government providing the funding that was committed for the Limerick regeneration project over two years ago. It is at a very sensitive stage and people are losing morale. This €3 billion project was launched amid fanfare by Government, with €1.7 billion to come from the State and €1.3 billion from the private sector. Proper government is about providing an environment where the private sector can flourish. One of the elements in the Limerick regeneration project should be to provide tax designation for investment within the areas in question.

In his speech the Minister raised a number of points, one being the solidarity bond. It is critical for the Minister to indicate in his response exactly how he sees the funds to be raised by solidarity bonds being used. Fine Gael has launched a ground-breaking document, New Era, which proposes significant job creation potential for up to 100,000 people in the areas essential for competitiveness in this economy, namely, water, energy and broadband. When we look at competitiveness we must look at it in the context of job creation. There are three elements to driving the economy forward. These are the three Cs - confidence, credit and competitiveness. This Finance Bill and the budget that preceded it lack any incentives in that area. We need to see the Government addressing these issues across a range of areas. Fine Gael proposes reduction of employers' PRSI for employees. We considered halving the lower rate and taking 2% off the top rate which would reduce costs for employers.

Energy costs are related solely to Government policy. In 2001 our cost for industrial electricity was average within the EU. We are now 50% below that average, with the second-highest cost in the EU.

Research and development tax credit should be available for offset against PRSI.

The air travel tax is ludicrous. I would love to know if a cost benefit analysis was done on the amount of money it brings in and how much has been lost in terms of people coming into the country, hotels, tourism and the general economy. In Limerick, in the mid-west and along the western seaboard we have suffered greatly from this tax and this fact has been reinforced by people such as Michael O'Leary.

The issue of credit flow to small business is critical. In a study done by the enterprise boards 96% of small businesses stated they have more difficulty accessing credit now than they had six months ago. This is having a detrimental effect on small businesses which are the lifeblood of the economy. The multinational sector is extremely important and there are measures dealing with it in the Bill that we will look at in greater depth on Committee Stage. I welcome that but we must have a rounded approach.

My worry concerns vision. My vision of Ireland Inc. is that in terms of sustainability it must be driven towards the SME sector. The multinational sector is vital in the provision of jobs but we are no longer a low cost economy. We must provide an environment where an entrepreneurial spirit can flourish. The rudiments for that are not present. There must be a practical edge to the way we deal with the SME sector. It is critical that we have corporation tax exemption for the first two years for limited companies but this should be extended to sole traders. The majority of people who set up in business set up as sole traders and entrepreneurs, not as limited companies. We want a situation where people will set up in business and become self-employed. Shortly, probably over the coming summer, it is conceivable that we will have 500,000 people on the live register. Of those, 250,000 have signed on in the past two years. That is an indictment of Government policy, apart from global factors.

We must provide an environment that gives competitiveness and brings confidence back to people so that they will spend again. They will do so only if they feel they have security in their jobs. We must be export driven. We are a small open economy. In 2003 we were that economy. When Deputy Richard Bruton was Minister for Enterprise, Trade and Employment, we were that economy. From 1997 to 2003 our exports increased. In 2003 they decreased.

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