Billy Kelleher (Cork North Central, Fianna Fail)

In the foreword the Taoiseach states jobs are the central tenet of Government policy. When one reads through the document, however, one finds that it does not live up to expectations in terms of the commitments made both in the foreword and the programme of Government.

We know what is wrong with the country. There is no demand or confidence and credit is not flowing to small and medium sized businesses, as the Minister of State is aware. I was a Minister of State in the same Department and we tried everything to get the banks to lend. They are failing to do so and consistently lying to the Government about how much they are lending. I will offer my full support, which may not amount to much, to the Government if it stands up to the banks. The pillar banks have received billions of euro in support from taxpayers through recapitalisation, yet they refuse to provide credit to small and medium sized businesses, the life blood of the economy. For how much longer will they squirrel away the money provided under the recapitalisation process? We all know they are refusing to lend and using the funding instead to reduce their debt to asset ratio. This is having a devastating impact on the broader economy. The 440,000 people who are unemployed will not be able to return to work, irrespective of Government action plans and commitments, unless the banks are forced to lend to the small and medium business sector to get the economy moving again. The banks and Enterprise Ireland used to provide expert support by assessing the traditional banking methods of a business plan, looking at profit and loss and the accounts of businesses. For many years banks were lending on the asset base rather than on the actual commercial venture. Unfortunately, they have now stopped lending on the asset base and are not getting involved in assessing business plans, even to those with experience. Their principle is to refuse to lend. One can broaden that to the whole mortgage area. As Deputies, we all have stories of people who are being refused mortgages. It is the policy of banks now that before they grant a mortgage they will ask for an evaluation of a house. When that is submitted the banks will claim it is not the genuine worth of the house and will decline to grant the mortgage. Although the claim is mortgage-approved the money cannot be drawn down. That is happening wholesale throughout this country. When Mazars and other consultants eventually examine this they will have to bore down to the basic fact that the banks are telling the Government lies on a continuing basis. I can safely state every Deputy in the House has evidence to show this. Whether by the whip or the carrot, banks must now be forced or encouraged to open up finance and let credit flow.

We talk about seed capital, research and development and investment, which are all credit-dependent. We have a wonderful entrepreneurial instinct in this country. In our small and medium-sized sector there are people who are willing to get up, invest their own money, take risk, roll up their sleeves and get stuck in. They need support now. I acknowledge the good points of this budget in regard to research and development and seed capital, which are critically important. However, we are asking the small and medium-sized sector to respond with one hand tied behind its back because it cannot access credit. This must be addressed.

There are two key issues in respect of trade and inward investment. In the first place, people must have confidence in the country. I welcome every opportunity the Government can take to promote Ireland as a place in which to do business and attract foreign direct investment. Such investment is of critical importance to this country, given the large multinational companies located here and the embryonic spin-offs they create. We can look to our excellence in software. One of the main reasons we have excellent people in this area is the initial establishment of some of these multinationals in the 1980s. That spawned, first, expertise and second, a nucleus built up around those same multinationals that has produced a second generation of the most wonderful and exciting software companies which locate in this country. One need only go up the road to Digital Hub to see what is being achieved. We are internationally recognised as a country which excels in software and design solutions and it is critical that we maintain that reputation. In that regard, those measures in the budget in respect of encouraging and fostering seed capital and investment in research and development are very important.

There is a second issue we must consider. Politics has been played out in its regard for a long time; it has been debated all over the country and there have been protests on the streets. We must put our universities on a sound financial footing. I do not know how we will do this politically because everybody opposes it or promises to oppose it; then they change their mind. Whatever way it can be done, we must protect our universities. If they want to compete and not only keep the brightest students in the country but produce the brightest students in the world, they must have the necessary resources. If universities are starved of resources only one thing will happen - they will drop down the league table. The best and the brightest will not work in them as professors, lecturers and academic researchers; the best and brightest students will not attend them.

That issue must be addressed in the short and medium term because there may be long-term implications for our competitiveness and our ability to attract the best international and multinational companies to this country. The Googles of this world and the other major players in IT and other high-end sectors such as life sciences and medical devices have stated they are having difficulty recruiting at the top end. That is something that must be addressed very quickly. If word goes out that our labour market does not have a pool of the necessary expertise those companies could easily change their view and look elsewhere. We have a wonderful product and a wonderful workforce and there is a critical mass across the various specialties throughout the multinational sector. It is critical to have investment in third level education and the co-operation of third level institutions in linking with businesses and industry, both in research and development and in the establishment of a strong commercialisation of research. We must do a great deal of work in this area.

Recently, I was in Taiwan and attended a university and research facility which applies for five patents a day. These vary from the smallest to the largest but that university churns out the best kind of student and the country has a wonderful international research and development set-up. We must aim at that which means having a stimulus and support for universities, with tax reliefs and vouchers to encourage and foster research and development among companies and universities, and the consequent commercialisation by patent of their ideas into the broader world. If this is not done very soon and this area does not receive continued support another type of signal will be sent out.

If we want to continue to attract the best kind of foreign direct investment we must stand firm and united in this House in regard to our corporation tax rate. This is supported by all parties, which is welcome. When I travelled abroad promoting the country there were times when this was difficult because the commentary would make one believe Ireland was almost as bad as Zimbabwe. We should always be conscious of this. Of course, we can be critical and objective but we must not be inflammatory and try to achieve a political advantage by denigrating the name of this country. We should all be very conscious of this because there is an impact when people speak irresponsibly about Ireland. It resonates across the world in a negative way even as Ministers, Enterprise Ireland, IDA Ireland and ambassadors traipse around the world trying to promote a positive image.

I support this work; I did it myself and it is critically important. As an island nation we will live or die by our exports and the view we should not be out there promoting our country is very short-sighted. We should not try to undermine Enterprise Ireland and IDA Ireland in what they are trying to achieve. I have stated publicly it is important that ministerial trade missions go ahead, even in this difficult and straitened time. We must send a very positive message that this country is open for business, that not alone can it keep its house in order and will go through with the difficult decisions that must be continued in the coming years but, more important, our economy is functioning, our corporation tax is being maintained, we will continue to invest in our universities and turn out the best qualified people and we are a capable and intelligent people. I believe this will attract further foreign investment and we will increase our exports as we have done dramatically in recent times. We must continue to sell a positive message around the world. I am in Opposition and it would be very easy for me to throw scorn and ridicule but our nation's position is a little more serious than that. Ultimately, it is about providing opportunity.

I refer to the discussion on promissory notes and related matters. The Minister for Finance must use every opportunity to try to encourage a broader debate on the role of the European Central Bank. It is critical and central to how Europe will function in the years ahead. There must be more obligation on the ECB, not only to address inflation but to become involved in a stimulative role in encouraging economic growth.

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