Kieran O'Donnell (Limerick East, Fine Gael)

I am pleased to support this motion. The Government amendment is an amendment for the sake of it. It comprises a lot of words but says very little. The Government is looking for co-operation and yet our motion is very direct and is committed to the maintenance of the 12.5% rate of corporation tax as an indispensable tool for growth, job creation and economic recovery. There was no need for the amendment. The Government could have agreed with what we put forward - a commitment to the maintenance of the 12.5% rate of corporation tax.

This rate was introduced by the rainbow coalition Government in 1997. I know was in practice at the time and saw the benefits of it. Companies in the indigenous sector were paying a 40% rate of corporation tax which was suddenly reduced to 12.5%. It was a major growth tool for small companies which were able to reinvest in their businesses and provide much needed jobs. It is critical to the multinational sector. Currently, more than 70% of our exports come from the multinational sector.

In terms of the ongoing negotiations and the European Commission, the European Central Bank and the IMF looking at Ireland, this is a fundamental tool to our industrial base, in particular to the multinational sector. If they are looking for repayment of funds extended, why take away the great tool we have in the form of the 12.5% rate of corporation tax? What also needs to be explained is that if we remove it, many of the companies here will not go elsewhere in Europe where the rates are higher. Therefore, it would be a loss tor Europe. That is something which needs to be put forward with great force.

The constituency from which I come, Limerick East, and the mid-west region, including Shannon, has an enormous cluster of multinational companies. It is probably the largest cluster outside Dublin. The multinational companies are great providers of employment.

The 12.5% rate of corporation tax is enshrined in the Lisbon treaty and it must be a bottom line issue. For me as a Deputy from Limerick, it is a vital component in terms of our industrial base, in particular for providing jobs. In terms of driving the indigenous industry, we must provide a climate which encourages entrepreneurship. The 12.5% rate of corporation tax leads to companies reinvesting in their businesses and, above all, to job creation.

The private sector will bring this economy out of recession. That is why I am so disappointed in the four year plan produced by the Government. We have a plan but it is not much of a plan. It lacks the measures to enable the self-employed sector to grow. However, I welcome the retention of the 12.5% rate of corporation tax. I hope the Government will not press its amendment and will support the motion in the interests of unity.

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