Alan Kelly (Tipperary North, Labour)

The jobs initiative represents the first of what could be 1,000 steps taken towards bringing about a full recovery of our employment, banking and public debt crises. Let us not pretend to be unaware of the scale of the problem, which is, to say the least, of potentially enormous and hugely challenging proportions. Turning it into a shouting match will not solve anything. It may well take decades to fully solve this Fianna Fáil created crisis. This jobs initiative should be judged not as a solution but as a step; not just preamble but progress. While it is only a step, a radical and imaginative one, it is extremely important nonetheless not alone because of the jobs it will create but because it demonstrates to the people of this great country that for the first time in 14 years the Government is listening.

The Government has represented the needs of our economy and people when it comes to our 12.5% rate of corporation tax. This is non-negotiable.When I was an MEP, while the other Administration was in place, I noted that many EU countries were of the opinion that we would be weak-kneed on this issue. Well, this Administration will not be weak on it. It is part of a package that works given our close relationship with the US, our well educated and highly skilled work force and the fact that English is one of our spoken languages and we will protect it. The contradictions are obvious across Europe when one parallels our rate with that of France , Bulgaria and so on.

The Minister for Finance, Deputy Noonan, has correctly outlined a five pillared approach to getting us out of this economic crisis. This includes restoring our reputation, restoring the banking system, making the public service cheaper but not compromising on social justice and most important, supporting and protecting job creation. What we have in this plan is a proper stimulus for the economy, one that is targeted and does not allow for mass leakage of the stimulus out of the economy. We want to kick-off construction but not reinflate the asset bubble. This is designed to get money working in the local economy of every part of the country, which is important. It does not have a totally urban focus. The construction workers whom this will rehire will, it is hoped, spend the money in their local communities, while improving school and road infrastructure. There will be regional spread, which I am sure Deputy Tóibín will welcome.

Unlike the Opposition, I do not believe in handing out funding to people who will spend their money on goods outside the state. This is a stimulus that is community driven not invented in the imaginary tales of the Opposition who seem to think they can solve Ireland's problems with idealist solutions, ones which they did not have a few months ago. This jobs initiative contributes to rather than undermines stability in the public finances. This is crucial for confidence going forward. This initiative is about spending existing resources with a jobs focus in mind. We are freeing up capital that would have rested in a Government account and is now being used to get people back to work. To be honest, it is not enough but it is a start.

Let us take for example the €75 million coming from Department of Transport, Tourism and Sport. It is being targeted at shovel ready initiatives. Rather than leave funding lying around until next year we are using it now in a time of crisis. This will produce many jobs in local areas where small contractors can get work they had not planned for. This will have a ripple effect throughout the economy, which I am sure the Deputy welcomes.

The local authorities will get work done at a really good rate given the greater value there is now in tendering for such work. This work is badly needed. Everyone knows our secondary and regional roads are in an awful state. The same applies in respect of the summer works programmes in schools. I am sure many Members have been lobbied about schools needing windows, roofs, toilets and so on. This work is badly needed and will create safer schools for our children. From a Department point of view funding needed to be provided as there was very little left in the coffers of the previous Administration. Also in the transport area, €15 million has been made available under smarter travel programmes across our cities and through applications through our local authorities. Again, these are labour intensive measures that should be welcomed. The retrofitting initiative will also be labour intensive and create a double whammy saving in the long term. This is good use of resources as each €10 million spent equates to €15 million that will be spent by the private sector in return.

It is important to remember that many of these initiatives, if not sustainable, will be reversed. The VAT reduction to 9% in the tourism area is part of a targeted incentive to create business. I believe it will work. I have a great deal of experience of the tourism industry having worked for Bord Fáilte for several years. This initiative is very much welcomed. We have an overflow of tourism accommodation, in particular hotel accommodation. This was fuelled by the insane tax policies of the previous Government. We should try to lower prices and to create demand. If we generate people traffic, those people will spend money and contribute to low-skilled primary job creation in this sector. It is critically important that the lowering of the VAT rate is passed on to the consumer and that they see the benefits. In particular, we need to see the benefits coming through targeting the domestic and British markets. This ties in to the visits by President Obama and the Queen. The push by the Government on the tourism sector has been considerable and I know it has been welcomed by the tourism industry.

On scrapping the air travel tax, I welcome this incentivising process. The airlines will have to deliver visitors for it to work, otherwise it could be reversed. It is a novel and welcome approach. The message for our tourism strategy is clear. Ireland was an expensive country to visit. It is now cheaper to come here, stay here and have a good time. The other unique aspect of our tourism industry is that it has the potential to create jobs in rural areas. Our strategy must be based on fair distribution of employment and this is achieved through changes in the VAT levels, the school building programme, regional road repairs and a new priority for tourism.

The new flexibility in the research and development tax credit should not be under-estimated. It is what will help companies when choosing to locate to a destination like Ireland. As a Government, I expect that we will want to do more in this area in the future and in particular that we will target certain sectors like software, gaming, computing and so on. The 20,900 places provided for people under the various internship, skills training courses, back to education and third level springboard programme and the specific conditioning of these places shows this Government is specifically targeting people who have lost their jobs. In addition to these measures, I expect that this Government will pursue with great vigour applications for further assistance from the European Globalisation Fund for workers that lost their jobs in the construction, financial and retail sectors. I understand the construction application is being actively pursued. I hope the Government will be in a position to use such funds in a much smarter way than did the previous Government, in particular with regard to the Dell fund.

I welcome the restoration of the minimum wage to €8.65 from July. This confirms the commitment given when this Government was formed. The Exchequer benefits from the €1 cut introduced by the last Government did not materialise. It only acted as a disincentive to work. Workers deserve this revision and it will help to rebalance peoples choices. Restoring the Irish economy will be like running a marathon. Following yesterday's announcement, we are on the right road and are now out of the blocks. More will come.

See this speech in context