Willie O'Dea (Limerick City, Fianna Fail)

I have listened carefully to the Minister and at the outset I should say that I do not for a moment doubt his sincerity or enthusiasm for the difficult task he faces. As somebody who continues to live in the country, I sincerely hope the Government will succeed in creating more jobs and that unemployment rates will fall rapidly, and as soon as possible. I acknowledge that the Government inherited a difficult position but our current state is extremely grim and somewhat frightening.

In 2009 the official unemployment rate stood at 11.8% and it rose to 13.7%, unfortunately, in 2010. Last year - the first year in the life of the current Government - the rate increased to 14.2%. Statistically, there are 443,000 people unemployed but that does not tell the full story. Up to 77,000 people have emigrated in the past 12 months, not to see the world as the Minister for Finance suggested but rather in search of employment. That is more than 200 people a day.

The structure of unemployment is also serious. Of the 14.2% of the population who are unemployed, some 8.8% represents people who have been more than a year on the live register, or the long-term unemployed. There is another category, the "very" long-term unemployed, who have been on the live register for more than two years, and these people are rapidly approaching a pretty hopeless state. They account for a third of the unemployed, with approximately 120,000 people who have been unemployed for more than two years. That is grim reading.

The Minister has a very tough job and I do not doubt his enthusiasm or sincerity, as I noted. The bar that the Minister must surmount has been raised by a number of actions undertaken, not by him personally, but by the Government of which he is a member. For example, there was a decision in the budget to increase value-added tax, VAT, by 2%, from 21% to 23%. That comes at a time when the domestic economy is lying prostrate, with retail spending down for the 47th consecutive month, according to recent statistics. The Minister is aware that VAT is a highly regressive form of taxation, which tends to disproportionately affect the poor. It seems somewhat contradictory that the centrepiece of the Government's jobs initiative last May was a reduction in VAT for some sectors, as this seems to have been reversed - in part at least - by a VAT increase in the budget. This comes at a time when the Government's statistics show that 54% of the people in this country over the past 12 months have reduced their spending on essentials such as groceries. Those statistics also indicate that 5% of the people, or one in every 20 families, gets by from one end of the week to the other by not paying gas or electricity bills, which is very serious. The decision to increase VAT is a job destroyer.

Another decision taken in the budget was to make it more difficult and expensive for small firms, in particular, to let go people. I know a number of small and medium sized firms which have had to downsize to survive. The net result of the Government's decision on redundancy payments is that it is now two and half times more expensive to let go somebody in this country than it is in our nearest neighbour and competitor, the United Kingdom. The Government has cited the position in other countries, such as Sweden and Denmark etc., but the scenario in those states is completely different and we should not compare apples and oranges. It is estimated that this action will load another €250 million on business costs at a time when most firms in the country are struggling to survive. That is a job destroyer.

I know of firms that are approaching a crisis. As it will be difficult to downsize and make people redundant, these companies would prefer to go out of business altogether. I spoke to a businessman in Limerick last week who wanted to expand his operation but he is afraid to do so in case his plans do not work out and he will have to downsize again; the cost of redundancy is putting him off. That is another job destroyer. There is raft of costs and hidden charges in the budget which will destroy jobs.

In every town and city, and even in the rural areas, the level of commercial rates is destroying jobs. I have read the document as carefully as I can but there is no commitment in the plan to do anything about this, to the best of my knowledge. The Minister has stated we are relying on local authorities to act decently but a one-line amendment to the valuation legislation could have provided an inability to pay clause, which would do more than all the hopes and expectations that local authorities would act responsibly. If one authority acts responsibly and another does not, is a distortion not created? Why not allow an inability to pay clause across the board?

Most forms of direct taxation are progressive in that the more one earns, the more one pays. Commercial rates are an obvious exception as a business would pay commercial rates irrespective of profitability, even if money is being lost hand over fist. If a business is starting up and is making a loss until it can get properly established, commercial rates must be paid. I do not know what the Minister has been told about what local authorities are doing with regard to freezing or reducing commercial rates but in my city, the majority of businesses are unable to pay those rates. There have been all sorts of deals with the local authorities but some businesses have even had to renege on those deals which involved a reduction in commercial rates.

Some of them have not been able to comply with the instalment arrangements that were made. Many people who would like to establish small businesses, and might have access to the finance needed to do so, are being deterred by the extent of commercial rates in this country. There is no plan to deal with that.

Crippling rents have torpedoed businesses in urban areas across the country, particularly Dublin. Many retail outlets have gone out of business. We are familiar with the difficulties encountered by companies like O'Brien's sandwiches, Superquinn, Chartbusters, Arnotts, Hughes & Hughes and Golden Discs. Thousands of retailers have gone out of business as a result of the legal inflexibility of this country's landlord and tenant legislation, which is totally orientated in favour of property rights, takes no account of economic reality and destroys jobs.

The Minister will be aware of a campaign that the Labour Party ran from one end of the country to the other. It got plenty of publicity for the campaign, which lasted 18 months. It said it had received legal advice to the effect that upward-only rents could be abolished. Unfortunately it did a U-turn when it came into Government. I do not want to cast aspersions on any individuals but I suspect that the Labour Party has many of the same legal advisers that it had before last year's general election. I would be intrigued to discover how the legal advice has suddenly changed.

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