Batt O'Keeffe (Cork North West, Fianna Fail)

-----we can drive economic growth from within this country and be growth makers. We have the track record, talent, technology and tax regime to do so. I do not agree with the Members opposite who believe Ireland is merely a growth taker. This country is capable of much more than that. It has proved it is able to do more than merely hold its own among trading nations. While the rest of Europe was suffering a double digit collapse in exports - Denmark's exports declined by 16%, Austria's by 20%, Sweden's by 24% and Finland's by 31% - Ireland's exporters were resilient and experienced a fall of only 4% in the teeth of a global recession.

The contribution of net exports to economic growth increased in 2009, with our agency supported exporters spending a staggering €38 billion on payroll and purchasing materials and services in Ireland. This is a key economic point that is frequently overlooked. By making our investments in winning foreign direct investments, growing indigenous exports and increasing research and development activity, we are not ignoring the domestic economy but investing in it also.

Along with direct investment in enterprise, there is one other critical aspect of how we are driving economic growth and job creation, namely, our continued strong investment in the smart economy. The development of a smart economy is a key component in the Government's economic renewal plans. The allocation of €161 million to Science Foundation Ireland means an increase of €11 million for the provision for research grants. This increase will enable SFI to stabilise the number of researchers and research teams and strengthen industry collaborations. This is vital to ensuring Ireland will retain the excellent science base we have built over the past decade. It will also send a strong message nationally and internationally that the Government's focus on driving the smart economy is on track.

The Government's investment has been critical to IDA Ireland's capacity to secure research and development related investments which run at €500 million annually. Five years ago foreign direct investment had a 10% research and development attachment. Today, this attachment stands at 50%. The IDA also supports indigenous companies reliant on knowledge for growth and job creation. In yesterday's budget, Enterprise Ireland received €130 million for activity in the area of science, technology and innovation. This is an increase of €9 million or 7% on the 2010 level. It is an investment that will put Irish companies ahead by enabling them to develop the competitive edge that innovation delivers. We are ensuring we have the optimal business environment for innovation, exports and job creation.

The tax environment is also an important element. Budget 2011 successfully balances new taxation measures with the need to do least harm to the businesses that will drive exports, growth and jobs. While the budget measures will result in taxation contributing €1.5 billion to the overall €6 billion adjustment, this will be done in a way that is least harmful to enterprise. Our competitive 12.5% corporation tax rate will not change, our top marginal tax rates will not be disimproved and our tax wedge will remain internationally competitive.

The budget does more than confirm our commitment to investing in jobs and growth through exports. It provides for targeted stimulus measures, including the extension of the corporation tax exemption for small firms, the modernisation and extension of the scope of the business expansion scheme and tax changes to improve contractors' cash flow. For instance, a withholding tax of 20% will apply to registered contractors in contrast to the 35% rate applied to non-registered contractors. The budget also extends the PRSI exemption scheme and car scrappage scheme, reduces the air travel tax and provides for energy efficiency measures. All of these measures will generate jobs and growth in the economy. Moreover, investment in the construction of schools and other infrastructure will continue.

The programme of activation measures set out in the budget will keep people close to the labour market and ready to take up the job opportunities that will arise as the economy recovers. The programme includes 15,000 activation places, reduces labour costs and provides for structural reform to incentivise people to take up employment. People will ask what is being done for the unemployed. Thousands of unemployed people are entering full-time third level education and thousands more are entering the VEC sector. In 2009, training supports were available for 65,000 people. In 2010, the figure was increased to 165,000 and we are making further provision for job placement in 2011. Specifically, we are making provision for graduates to gain nine to 12 months experience with multinational companies and other private firms. This initiative will ensure the programmes graduates have pursued are embellished with the experience they gain with private companies. Graduates and their parents will welcome this development. The Government will continue to address such issues as they arise.

While the budget is difficult, as Minister for Enterprise, Trade and Innovation, I am satisfied the Government has delivered the necessary investment to support Ireland's enterprise sector, the engine for economic growth and job creation that will benefit every sector and town.

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