Tom Barry (Cork East, Fine Gael)

I welcome the Bill, which gives effect to the measures in the jobs initiative. Four main areas are covered, namely, the research and development, or R&D, tax credit, the suspension of the air travel tax, the introduction of the lower VAT rate and the introduction of a pension levy. Similar to the position with corporation tax, which is very important for attracting foreign direct investment - we have recently heard all the arguments for retaining it while other countries try to make us increase it - the R&D tax credit is also a measure of huge importance. Some 25% of incremental expenditure on qualifying R&D can be set against corporate tax liabilities. The Bill enhances the flexibility for the accounting of R&D tax credit by giving an ''above-the-line'' tax credit. It makes three amendments to section 766B of the Taxes Consolidation Act 1997 which address the payroll liabilities, the relevant payroll period and the payable credits. Basically, it facilitates a better operational status of this measure.

The second area is the suspension of the air travel tax. The Bill amends section 55 of the Finance (No. 2) Act 2008 to reduce the air travel tax to zero and suspend it until the end of 2012, at which stage it will be reviewed. This puts the onus back on the airlines, which are constantly complaining, to deliver. This is positive because, as they say they can deliver, let us see whether they act accordingly. Hopefully, this will help to boost tourism numbers, which have been dropping year on year. From the implementation date, which is set at 1 July 2011, the measure is set to cost €105 million to December 2012. It will also hopefully provide a stimulus to revitalise the tourism industry, particularly literary and cultural tourism, where there is huge potential. Unfortunately, not even this good Government can promise wonderful sunshine or promote the country as a sunshine destination so we will have to look to other areas to encourage visitors to come.

The third measure amends the Value-Added Tax Consolidation Act 2010 to provide for a second reduced VAT rate of 9%, which will apply mainly to the tourism trade. It will last until December 2013 and will cost up to €820 million over the complete period. This is a bold and decisive move by the Government to aggressively encourage tourists by enhancing our cost competitiveness and giving better value for money to all who come here. Our nearest neighbour, the UK, will get even greater value given the sterling-euro exchange rate. This will help to reverse the 32% decrease in tourist numbers from the UK from 2007 to 2010. The amendment covers a number of areas, including restaurant and catering services, hotels and accommodation, admissions to cinemas, theatres, musical performances, art galleries, fairground amusements and sporting facilities, as well as hairdressing services and printed material.

It is worth noting that the reduction from a 13.5% to a 9% VAT rate will help to encourage and develop the arts by making theatre and musicals more affordable. It will encourage new talented Irish people and others living here to follow their talents and their dreams because it will create a market and help to provide them with a livelihood, which is a positive spin-off, and it will also make our country more attractive in the process. It will also help to fill the very high standard of accommodation which we have. While many think in the main of accommodation in the cities, there is also accommodation in our rural communities, such as in the Blackwater Valley, where I live and where we rely on tourists to come for fishing and the relaxed way of life. Many farming communities have built fabulous supplementary accommodation to bring tourists to Ireland. The Bill will help in this area also. On a lighter note, if all of these tourists cut their hair on their way home because they have had such good value for money, it will bring an added benefit.

More seriously, I hope the Revenue Commissioners desist from harshly penalising minor infringements in regard to late payments of VAT by reputable companies. I have had an issue with this practice for some time. When people are owed VAT rebates by the Revenue Commissioners, they cannot get paid on time. However, there are those with a good track record whose only fault is that they do not have a proper cash flow because others are strapped for cash also, and who, in the absence of a practical banking system, cannot pay on time, although they may pay within a month. The Revenue Commissioners could certainly show some lenience in that regard.

The fourth measure imposes a levy of 0.6% on the capital value of the assets under management in pension schemes. The levy will last for four years and will hopefully raise €470 million. Difficult as it is to bear, and many are angry and critical about it, if this succeeds, it will hopefully benefit pension funds in the future. It is worth recognising that this measure is being taken to tackle the enormous black hole we have inherited from the previous Government. I cannot but smile wryly when I hear Deputy O'Dea speaking of loopholes in the Bill. He has become terribly clinical. Where were all the soothsayers and people who could see into the future in the last Government? The real loophole here is a financial recklessness into which the previous Government entered. It did not envisage that it would absolutely ruin the country. When I hear the Deputy using quotes from 1998, I shall quote him back straightaway. He mentioned people in business to whom he spoke. I hate that the Deputy has left the Chamber but he can watch the debate on video link. I run a business and we need to instil confidence back into the country. We are picking up the pieces from a Government that fell asleep at the wheel.

I heard a former Minister state it was lucky that pension funds were invested outside this country. What does that mean? Does it mean that when the former Government was in power, breaking the country financially, it encouraged people to leave, knowing the place would be a basket case? I am upset that people can wreck a country, stand up some months later and act as if they were Robin Hood, able to fix everything in a short while. It is extremely hard to rebuild after the devastation they caused. At present I am working to try to bring back a sugar industry to the country. There are talks and troubles and we are attempting to have a feasibility study. However, the amount of work involved in returning industry to this country after the destruction of our indigenous industries is considerable.

I welcome this Bill, therefore, even though parts of it are unpalatable. We must go through with it and my generation in business will pay for it. I will not emigrate; we are the people who are stuck. We are glad to stay here and want to see our country return to a position of solvency. However, I will not tolerate the people who broke this country criticising the efforts we make to restore it to its former glory.

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