Deirdre Clune (Cork South Central, Fine Gael)

I will start by referring to the last point raised by Deputy Noonan. I was very disappointed and disgusted to see that the Government saw fit to table a counter-motion to a very clear, simple statement. All we wanted to do was achieve agreement. There should have been cross-party agreement and a statement from this Parliament that the corporation tax rate of 12.5% is intact and not under threat of being increased. The tactics used by the Government are similar to those used by it approximately three weeks ago when Deputy John Perry proposed to introduce a State-backed loan guarantee scheme for SMEs. We hoped the Government would have accommodated this. Perhaps the motion was not entirely as the Government would have liked it to be. The Minister for Enterprise, Trade and Innovation, Deputy Batt O'Keeffe, stated last September that a scheme such as Deputy Perry's should be introduced, yet the Government had to vote down Deputy Perry's motion and table an amendment. Clearly, party politics is entering the equation when it should be a matter of the Parliament standing firm behind the corporation tax rate, which is very important to protect Irish jobs and attract future investment.

We are a small island nation on the edge of Europe. While we speak English and have an educated workforce, we should realise the corporation tax rate of 12.5% has been a cornerstone of our economic development. It has represented a huge draw in attracting foreign direct investment.

When one considers the number of jobs created in Ireland through foreign direct investment, one will note this figure per head of population is higher than that in any other country in Europe. Foreign direct investment supports approximately 240,000 jobs here. Foreign direct investment accounts for 50% of our corporation tax and 70% of exports. It is estimated that it is worth approximately €19 billion in expenditure in the economy.

The OECD estimates that a 1% increase in the rate of corporation tax will lead to a decrease in inward investment of 3.7%. There will be a corresponding reduction in the yield from corporation tax and also in the yield from all the related taxation elements, including those pertaining to employment.

Apart from the impact on the economic take, there is an impact in the sense that the corporation tax rate is extremely important for attracting jobs. If one considers various sectors, including biopharmaceuticals, biotechnology, financial services and technology services, one will note the private sector is actually the main driver of our economy. The Government only accounts for approximately 20% of our GDP. We have done so well in attracting large companies, products and services to Ireland. Eight of the top ten global medical technology companies are present and manufacturing in Ireland. They have the highest per capita employment rate across Europe in this sector. Each of the top ten pharmaceutical companies is operating in Ireland. In ICT, nine of the top ten companies are based in Ireland. The number of Internet-based companies is growing. They are growing their bases here and there are clusters and networks developing in this area. We must not forget the importance of indigenous companies. Half of medical technology companies are Irish. Software is becoming a significant export. Reference was made to the quality of our food production and the value it contributes to our exports.

We must send out a message demonstrating the importance of our corporation tax rate to protecting jobs and ensuring future development. If we are to get out of the economic turmoil we are in at present, increasing our corporation tax rate will do nothing to bring that day forward; it will make matters more difficult. That message must be sent out loud and clear to our European partners.

Let me quote the Referendum Commission's remarks on taxation during the recent Lisbon treaty referendum campaign: "The European Council has also made a decision which sets out the effects of the Lisbon Treaty on Irish policy and law in a number of areas: the right to life, family and education; taxation; and security and defence."

Furthermore, it stated:

Ireland's policies on direct taxation cannot be changed by the EU unless there is unanimous agreement in the Council of Ministers. Ireland therefore has the power to veto any such change and the Lisbon Treaty does not change this. The European Council has stated that nothing in the Lisbon Treaty makes any change of any kind for any member state in relation to the powers of the EU in respect of taxation.

That is a very important point.

The debate on this matter has probably become academic. It is important, however, that the Dáil should send out a clear and unambiguous statement in respect of the importance of our corporation tax rate. I would have liked to have referred to the economic uncertainty into which we have been thrown in the past 24 hours. Fianna Fáil's partners in government, the Green Party, have contributed further to the turmoil that exists. We need a general election to provide the certainty and clarity that are required. We will debate that matter on another day.

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