Michael Noonan (Limerick City, Fine Gael)

Over the last number of years, the Irish economy has suffered enormously, and by extension so too have the Irish people. The bursting of the property bubble has had severe adverse implications for the economy, the public finances and the banking sector, and the fallout has been exacerbated by a global downturn.

However, the Deputy should also remember that it was strong export-led growth which provided the basis for the original pick-up in economic activity in the early to mid-1990s. This is how growth in a small open economy such as Ireland's should be driven, and we are once again seeing evidence of that, with exports growing by over 6% in 2010 and by 4.5 % in the first nine months of 2011. This growth is broadening out into the indigenous export sector, with areas such as agrifood and tourism performing well. The growth in our exports reflects significant improvements in competitiveness, which are allowing us to trade our way to recovery. Indeed, economic growth has returned, with my Department projecting that last year saw real GDP growth of 1%. As a result of the export-led recovery, the current account of the balance of payments has also returned to surplus, which shows that Ireland as a whole is once more paying its way. This is a crucial signal to investors.

Evidence of Ireland's enduring attractiveness as a location for foreign direct investment was underlined by the IDA's recent announcement that a record number of new investments were won last year. This will underpin further export growth into the future.

While the economy is growing again, it will take time for export growth to feed through to the labour market and the domestic economy. Moreover, it will take households and firms time to work through the imbalances which had built up during the boom. The Government is acutely aware of the headwinds which the domestic economy faces in this regard. We have therefore taken a number of steps to support domestic activity and job creation, including the introduction of the jobs initiative shortly after coming into office and the structuring of the 2012 budget in such a way as to be as growth friendly as possible.

The jobs initiative is an important part of the Government's overall strategy to establish the correct conditions to allow our domestic economy to recover, while at the same time respecting the requirement to return our public finances to a sustainable position. It should be viewed as one element of a wider strategy to support economic activity and will be followed up shortly by the action plan on jobs which the Minister for Jobs, Enterprise and Innovation will publish shortly.

Additional information not given on the floor of the House.

The establishment of NewERA and the strategic investment fund within the National Treasury Management Agency, which the Government announced last September, is a further major initiative within the domestic economic sphere. The Government has also taken a number of steps to ensure there is sufficient credit available to business. I have also sought to support firms and encourage job creation through extending the three-year start-up relief scheme, improving the research and development tax credit scheme and replacing the business expansion scheme with a new employment and investment incentive.

While the Government is taking every step to support the recovery of the domestic economy, there is no quick-fix solution. We must continue to deliver on our commitments under our EU-IMF programme and, in so doing, we will ensure that the programme works for us. The challenges are substantial and this is why the Government has focused on three main priorities; restoring order to the public finances, repairing the banking system and restructuring the economy towards a sustainable growth model. We are on track to bring the deficit below 3% of GDP by 2015, the banking system has been recapitalised and the economy returned to growth last year following three successive years of annual declines. In short, the Government is delivering a return to sustainable growth which capitalises upon the underlying strengths of the Irish economy.

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