Kevin Humphreys (Dublin South East, Labour)

I wish to be associated with the remarks on the former Deputy Bell from Deputy Nash. He is a great loss to the Labour Party. I realise statements will be taken on the matter later.

It is important to listen to each other when we hold these debates. I refer to the earlier remarks by Deputy Donnelly and the contribution of Deputy Mathews. We did not get into the situation we are in all by ourselves. We did not get into the situation as a result of Fianna Fáil alone. There was a contribution from the rest of Europe as well and the cost of getting Ireland back on its feet must be shared throughout the EU. At this stage we are being treated despicably by our partners, who must take partial responsibility. It is has been constantly stated in the international media that Ireland is taking the measures to get the country back on its feet but it needs the assistance and help of our EU partners.

Over the last decade, we have invested significantly in research and development. I heard Deputy Clare Daly speak earlier about research and development tax credits. I come from the private sector, the pharmaceutical and technical industry, and in my experience, if we can anchor research and development in the country, we will anchor good jobs throughout the economy. If we can hold on to the research and development element and attract it into the State, it will grow further good quality, well-paid jobs. I welcome the increase in flexibility for research and development. It will encourage Irish companies to innovate and create the products and technology of the future.

Reductions in VAT on sales related to tourism, along with the removal of the airline travel tax, are excellent proposals and will increase the numbers of visitors. This morning my colleagues in the Labour Party told me that bookings are up and that there is a new increase in awareness as a result of the visits of Queen Elizabeth II and President Obama. It is also a result of the attractiveness and competitiveness coming into the economy. That attractiveness will grow and these measures will increase our competitiveness. There have been studies that show general VAT rate cuts do not have a high impact on consumer spending but the way the Government introduced those cuts will attract more tourists to Ireland and if the removal of the air travel tax is not successful, we will go back to it. The challenge has been offered to Ryanair and Aer Lingus that if they increase routes and tourist numbers, the cut in tax will stay but if the numbers are not delivered, the tax will be reimposed.

The PRSI reductions for low-paid staff are a significant concession to the hospitality and catering industries. Their calls for changes to the working conditions of their staff through the restructuring of the JLCs should not be followed; we are already showing flexibility and working together. Research has shown wage rates in the hospitality sector were 11% below the EU 15 average in 2008. We have made major concessions to that industry to make it more competitive. Any further increases in competitiveness cannot come through reducing pay for those on low wages. I also ask the Minister to keep tax expenditures under review because it is important these are passed on.

I am concerned about the amount of money being spent on tax cuts. I would prefer to see more of the money invested in infrastructure projects that would have the effect of addressing major structural issues in the labour market with the collapse of the construction industry. Many unemployed workers have no chance of being re-employed in the construction sector so we must establish a sustainable construction industry.

This is a small levy in comparison to the charges for managing pension funds; it is only 0.6%. At the moment, members of pension funds are being charged 1.5% for the management of funds that have lost money because of bad management over the years. This is a four year temporary measure when we badly need investment in jobs.

This jobs initiative is the first step. I look forward to seeing increased employment and confidence in the economy and this is the first step in that direction.

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