Tom Fleming (Kerry South, Independent) | Oireachtas source

In the build-up to this budget we had higher than expected economic growth, higher than anticipated tax revenue and a lower debt interest payment. However, the benefits of this have not crept down to the greater population and society, unfortunately. While there is some give in the budget, there is still a huge burden on our citizens, who are trying to cope after six years of crippling austerity budgets where €30 billion was taken out of the economy.

It is ironic that we are still one of the fastest-growing economies in the eurozone. This is mainly due to our high level of export trade, particularly with Britain and the USA, which are currently experiencing buoyancy and slow growth in their economies. Our economy probably turned the corner over 12 months ago, and the Central Statistics Office has recorded four quarters of solid, sustained growth. It is the first time in many years that the domestic economy has improved along with the very strong export trade.

It is encouraging to see that over the past two years, the numbers at work have increased by 65,000. These are full-time jobs, by and large, but over a third of the increase is among the self-employed and business start-ups, and, unfortunately, many of these will not survive, mainly due to difficulties with accessing credit and State supports. These businesses have had a very volatile time, with many obstacles in their way in trying to maintain their viability. Overall, the scale of unemployment is actually greater than the headline figure. In addition to the 250,000 who are actively seeking work, there are approximately 45,000 in short-term Government schemes who are counted as fully employed, although this is not the case, approximately 50,000 who have given up looking for work but who want a job and over 130,000 part-time workers who want full-time work. That brings the figure up to 500,000 people, and I am not taking into account the thousands who have emigrated in recent years and would like to return. It is a frightening scenario, to put it mildly.

The Minister, Deputy Noonan, rightly stated that small and medium-sized enterprises are the lifeblood of our economy. I welcome the budget initiatives and, if they are belated and too little in some ways, they represent some support to the SME sector in regard to access to finance through loans and the seed capital scheme. However, we must be mindful of the fact that over 99% of Irish firms are SMEs and 69% of private sector employees work for an SME. It is evident, therefore, that growth in employment will be dependent on the growth of smaller businesses. To take the current employment boom in the UK as an example, this upsurge has its roots in people becoming self-employed and starting businesses and, more broadly, in the growth of SMEs due to appropriate state supports in that country.

Ireland reveals its antipathy towards small businesses via the tax system. There is absolutely nothing in this budget to address the historical anomaly that sees us bend over backwards to accommodate the tax desires of larger non-Irish companies while we design domestic taxes to penalise the self-employed. Very obvious in this regard is the fact that the top marginal rate is 55% for the self-employed rather than the 52% which applies to the general workforce, when there is no rational explanation for this difference. There is also discrimination against low-income enterprises, stemming from having tax credits for all workers except the self-employed, which has the bizarre effect of penalising the lower-paid self-employed worker. There was an opportunity to signal a change in attitude towards the self-employed with a drastic simplification of the tax code. There was huge scope to act in this budget to alleviate the problems that exist but, unfortunately, this opportunity was missed.

On foreign direct investment, the IDA has failed with regard to regional development and attracting investment for job creation outside Dublin and the industrial zones of Cork and Galway. There has been progression of the industrial clusters, particularly along the east coast and centring on the Dublin region. The statistics show that unemployment rates are up to 40% higher outside the capital, which is a serious indictment of our policy of attracting foreign direct investment. It clearly shows there is a need for a more focused regional enterprise strategy, and this needs to be acted on in the immediate future.

I recently tabled a parliamentary question for the Minister for Jobs, Enterprise and Innovation, Deputy Bruton. It was very revealing that my own county of Kerry has had only one visit in the past nine months from the IDA accompanied by an investor.

I think this is reflective of what is happening throughout rural Ireland. There are several other counties in the same situation. The three Ministers here should take note of that and convey the message to the Minister for Jobs, Enterprise and Innovation in particular that this must be looked at. I welcome the fact that broadband is being extended. The Minister for Communications, Energy and Natural Resources has visited Kerry recently and has made good announcements. It is very positive. In tandem with that, we need to get employment opportunities for our people to keep them at home, particularly our young people.

Youth unemployment stands at over 26% when the standard is in the region of 12% or 13%. In the 18-25 age group, the rate is 26% while the rate for those over 35 is about 10%. This is not good enough. I welcomed the announcements by the former Minister of State, Brian Hayes, and all the positive things that have happened in the budget but we are dependent on vibrant agricultural and tourism industries. Both these sectors are vital to our economic revival.

The agri-taxation measures are positive and will lead to the promotion of activity in farming through facilitating active farmer participation and helping young farmers get established and acquire a more practical, long-term lease of land. Up to 55,000 farmers are leasing land and there is now a greater incentive for longer leases as well as the introduction of measures to hand over land to the next generation. The incentive for the 15-year leasing scheme is very attractive for both landowners and the proactive farmer. However, the fact that inter-family leases are not catered for is a serious omission and the exclusion of inter-family long-term land leases from the higher income tax exemption should be amended. It should be treated as a business venture even within a family, recognised and accepted. I believe there is a need to reverse and amend this provision immediately when the Finance Bill comes before the House. A farmer who leases land to a family member does not benefit from this higher income tax exemption while they would benefit from it if they leased to someone outside the family. This leaves the family member at a disadvantage.

The increase from three to five in income averaging is also very welcome because farming is a volatile business due to global markets. All these outside influences are having an effect. I welcome this strategy and the other announcements here, including the retention of the 9% VAT rate for the hospitality industry.

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