Beverley Flynn (Mayo, Fianna Fail)

I welcome the opportunity speak on the motion. With the publication of the four year plan today, I am delighted the Government has reconfirmed its commitment to the 12.5% corporation tax rate, which is central to our employment policy, growth policy and the total growth of our economy. One need look no further than the comments of the president of the American Chamber of Commerce in Ireland for an indication of how important this tax rate is to Ireland's economy. The president said foreign direct investment accounts for €110 billion, 70% of total exports in the Irish economy, 240,000 jobs, 55% of corporation tax, €19 billion in direct expenditure, €7 billion in payroll costs and 73% of the business spend on research, development and innovation.

I am fortunate to come from a county that has benefited in a major way from foreign direct investment in the shape of four major companies, Baxter, Hollister, Ballina Beverages, known as Coca Cola, and Allergan. Only recently, Hollister, with the announcement of an additional 250 jobs in my county, stated that the key reason for its locating those jobs in Ireland was the 12.5% corporation tax rate. If we need any further recent indication of just how important and influential the rate is, we see it there. The benefits are seen not just in my county. The spin-offs from these companies in terms of the benefit to indigenous companies is very significant and everything possible must be done to retain it.

The four year plan is based on average annual growth of 2.75% over the four years and that growth will only be achieved through the development of exports. When we see that foreign direct investment accounts for 70% of our exports, it shows how significant international companies will be in the development of this economy for the years ahead. It is great that all Members of the House are at one on this matter. It is highly important that, as a country, we would resist any attempts, whether from Europe or anywhere else, to in any way interfere with our corporation tax rate.

When we passed the Lisbon treaty, we went to the Irish people. In the course of the first Lisbon campaign, one of the key concerns was the fact corporation tax might be interfered with so we got legal guarantees which made it very clear that this was a matter for Ireland itself to decide. Considering some of the comments from Ms Angela Merkel and Mr. Sarkozy in the past days and weeks, we see clearly that this remains the position. It is important that we reiterate and preserve this into the future as it is so significant for our economy.

The corporation tax rate is the key plank in the policy of IDA Ireland and Enterprise Ireland in trying to attract investment into Ireland. It has come about over a number of years. Corporation tax was as high as 50% in 1986 and 40% in 1996, so we can see how significant the low rate has been in the period since then. While we are fortunate enough to have the benefit of these companies locating here, it is important that any capital programme, although slightly reduced as it will be under the four year plan, would be focused on areas where we have companies like Baxter, Hollister, Allergan and Coca Cola, particularly in regard to roads and infrastructure development.

It is important we do everything we can to retain jobs given the significant input these companies have in our economy. I want to put on the record of the House, as I have done on many occasions, that a 40 km portion of the N5, the main artery between Dublin and County Mayo, needs to be upgraded to safeguard such companies, some of which have had a base in this country for 38 years. These are not fly by night companies but have been here as long as 38 years, as in the case of Baxter in my town. They have been encouraged to stay, are investing in research and development and are committed to the future. A large part of that is because of the 12.5 % corporation tax.

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