Brian Hayes (Dublin South West, Fine Gael)

I wish to share time with Deputy Mary Mitchell O'Connor.

The most positive aspect of yesterday's announcement by the Minister for Finance to the House was his honest assessment that this was a modest proposal. The Government is not making extravagant claims about the number of jobs that will be created under this initiative. We are being honest and up-front with the public. As the Minister for Enterprise, Trade and Innovation, Deputy Richard Bruton, said, the future of the economy will not be based on grandiose plans, of which we have seen far too many in the last ten years, with extravagant claims that 50,000 jobs will be created here or 80,000 jobs there. The public do not believe this. We must get down to the task of restructuring the economy and getting people back to work through a series of measures that can make a difference.

The Opposition has known about this announcement since the programme for Government was first published and presented to the House. I recall the Minister for Finance and others at that stage asking Opposition Members to submit ideas to the Government on how they would do things differently. I recall deliberate opportunities given to the Opposition to provide submissions, as in the normal budgetary process, but we did not get any. I find it astonishing that the two largest Opposition parties did not submit proposals to the Government about a jobs initiative. Either we are serious about this or we are not. We can pretend to play Punch and Judy politics and have all the commentary that goes with this, or we can concentrate on the job in hand. It is unbelievable the Opposition parties did not submit proposals when they knew the Government was going to introduce an initiative in the first 100 days. The Opposition needs to be clear about this. It is a question of confidence. We are trying, slowly but surely, to return to the job-rich growth that occurred in the economy, particularly from 1995 to 2002 - that golden period when we were leading the way and creating jobs across the economy, especially in small enterprises. What happened after 2002, as we all know, was that the property boom took off and many of the jobs created in construction were unsustainable in the long term.

We have had successes in the first few weeks of the Government. As promised, we have raised the national minimum wage by agreement. Importantly, the next tranche of loans of €20 million or less that were to be given to NAMA were not transferred because of the agreement we sought. We have obtained agreement from our international partners on this series of measures because they recognise that the future must be based on job-rich growth. The Government is continuing to work with our EU colleagues in attempting to achieve a reduction in the interest rate on the EU portion of the loan.

We recognise that the only way forward for the economy is to get the banking system working again. The management and directors of the two pillar banks have a fundamental responsibility to get their hands dirty, to get on the floor and realise what goes on at branch level, in order that they can better understand their business. When restructuring occurred in the United Kingdom in the early 1990s, at the height of the recession there, those who ran the banks were obliged, for the first time, to get onto the floor and learn about what was going on. Our banks must learn about pubs and ordinary businesses. They must go back to traditional banking methods. This is an essential part of the restructuring process that the Government is driving.

The other part of the restructuring process is something that was referred to yesterday in the House by the Minister. A commitment was given by the banks to invest €30 billion in the economy in the next three years, including €20 billion in the SME sector. This must be driven politically. We need to find out on a month by month, quarter by quarter, sector by sector basis whether it is happening. That is the challenge for the Government, the Department of Finance and the Central Bank: to make sure the essentials of that restructuring - getting money out, through the banks, as the best way of improving the economy - actually occur.

There is an orgy of negativity and the people want to move on. They want to get back to a path of growth. We see growth re-emerging this year after three years. We still have 1.8 million at work in the economy. Although it is crucial to increase the number of jobs, we also have a plan to retain every single one of these jobs by making sure the economic environment is right. As the Minister said, we saw exports rise by 9% last year. We are in a good position in terms of the balance of payments; we are paying our way in the world again. It is through such slow, deliberate, step by step, brick by brick confidence-building measures that we can get the economy working again. Within the banking system, there is €96 billion in ordinary deposits. There is no confidence to spend because, although the export sector is doing well, the domestic economy is lagging far behind. The trick is to ensure confidence rises again in order that people will start spending because that money is still there. At the heart of the announcement made by the Minister yesterday is confidence that we can create new jobs by adjusting taxes on the PRSI and VAT sides, particularly in tourism. These are focused measures that can deliver the confidence we need.

With regard to the pension levy, it is worth pointing out that at the last count, the amount of money invested by the taxpayer through tax forgone in pension reliefs was about €3 billion, compared to about €450 million in property reliefs. Understandably, the taxpayer has provided enormous benefits for those who put their money aside, up to a marginal rate of 40%. What the Government is looking for is a figure of 0.6%, in a context in which, on an annualised basis, the management fees for many of these funds run to more than 1.5%. This is not a huge levy. It is a temporary measure to ensure we will have some funds to contribute to growth in the economy. It is well tested and will provide the funds needed to help reboot the economy. The Minister wants to speak with representatives of the pensions industry to work out the details, but he is absolutely convinced, as we said before the general election, that this is a measure that can help to improve the economy. It is well tested, well timed and modest.

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