Tom Barry (Cork East, Fine Gael)

I congratulate the Minister on this progressive budget from a progressive Government. It is a pity there is no Opposition here to listen to the other side of the argument. While they are writing their arguments about how wrong all this is, they are not prepared to listen to the counter argument.

I am one of those people who set up a small to medium sized enterprise 16 years ago. Thankfully we are still in business; we are only a small business with less than ten employees but we create good employment. At least I know what I am talking about. Some of those who spoke today, as my late mother would say, would put wooden legs on hens for us. They have no clue what they are saying. It is just rhetoric.

Let us look at the facts. The first €100,000 of research and development expenditure for all companies is allowed as a tax credit. This is an excellent idea because jobs will be created in research and development. Outsourcing of research and development is allowed for small companies that do not have in-house facilities. Corporate tax exemption for start-up companies for three years is another good idea. There were commitments on the 12.5% corporation tax rate and a microfinance scheme where businesses with less than ten employees can get loans of up to €25,000. They may have had credit refused due to a lack of collateral or the banks considered them too high risk so this is being put in place. A temporary partial loan guarantee for businesses that have insufficient collateral or where the lender does not have enough skills or could not be bothered listening to the application is another good scheme that will play a part for small businesses in the years ahead.

The new seed capital scheme for PAYE workers who have become redundant and want to form a business was not mentioned. They can place the previous six years income tax into share capital in their new company. Along with a redundancy lump sum, this will provide opportunities for enterprising people to create business. This is what it is all about.

Foreign earnings deduction is a brilliant idea which will drive exports into countries such as China, India, Brazil, Russia and South Africa. This will be a great help to the food industry, because at present we are supplying huge amounts of baby formula to China, an amazing market. China has only 8% of the world's landmass but 20% of the world's population so there are huge business opportunities there.

The Government's commitment to farming is commendable. Following the excellent document Food Harvest 2020, the Government has allowed stock relief for farmers who are expanding their herds. There is a reduction in stamp duty from 6% to 2% and 1% for close relatives up to 2014. These are good measures that will encourage land transfer because young people must be brought in. We saw what happened to the beet industry when there was no transfer of quota from old to young and a corrupt Government - we lost it. Only 0.5% of the land in this country is offered for sale each year so this will help it along. There are benefits in capital gains tax and retirement relief to incentivise early transfer of farm assets and encourage the sale of assets by those with no successors. That is vital because land must be transferred. Fragmentation is one of the biggest issues in successful commercial farming.

Open farms will benefit from a 9% VAT rate and the universal service charge exemption is being increased from €4,004 to €10,036, benefitting low paid workers. Farming has been always a low paid sector but people are happy doing it; they never wanted the millions that were thrown around, they just wanted to keep working. Look what they have done; they are the sector that has grown by €1 billion in exports in the recent past.

The carbon tax is a hit but at least the Government has recognised it and is giving double income tax relief for increased costs. That must be welcome. The Government recognises that farm partnerships are important by granting the stock relief.

Mortgage interest relief of 30% for first-time buyers between 2004 and 2008 must be welcomed. This will go along with the Keane report. I have worked in this area because this Government is adamant it will address the mortgage situation that is crippling part of this country. Those people deserve to be treated properly and we will work with them and hopefully find a solution. It will not happen overnight but it will happen.

The two restructured pillar banks have targets for lending to small and medium sized businesses, €3 billion this year, €3.5 billion next year and €4 billion the following year. I hope we can make sure they follow these targets. They must be set because the banks will not do it on their own.

There has been an increase in personal taxation rates but if we listened to the Opposition, we would think we had robbed every penny from their pockets. This is the first time I remember a budget that does not affect personal taxation. That is important.

The VAT rate increase is there but as someone who runs a business, we have discretion on the VAT we charge. I charge a lot of VAT and pay a lot of VAT buying and selling but we have discretion of up to 10% when trading because we are so glad to get a good sale, we will discount. The 2% will come out of the discretionary 10%. That cost can be borne and will contribute to bringing back the country economically.

Exports are up 4.6% this year and next year we are expecting growth of 3.6%. This could be an awful lot more and we are narrowing the Exchequer deficit. We have modest growth targets next year of 1.3% but we are in the food business and have the infrastructure to create lots of value added food. We are a food exporting nation and we should seek to feed 50 million people with high value and high quality produce. People have to eat; they might not buy televisions but they will feed themselves. A reduction in interest rates and stability in Europe will help us and if we get half a chance we will beat these targets and bring back our economic sovereignty.

The primary focus of this budget is job creation and taxes on employment were kept to a minimum. I commend the Minister because removing €3.8 billion was a difficult job but he has done it. He showed us the way forward and if those who were giving out sat down and looked at the facts, they would realise this budget will be remembered for a long time because it is a progressive budget that will help us regain our sovereignty.

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