Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

I move:

That Dáil Éireann:

recognising that the largest ever increases in the number of people on the live register were recorded in January and February 2008, with 16,300 more people signing on during this period, bringing the total to 187,900;

noting that the unemployment rate has increased by 0.5% and that the live register has increased by 20,605 since the current Minister for Enterprise, Trade and Employment, Micheál Martin TD, came to office;

noting that the unemployment rate now stands at 5.2%, its highest rate in seven years and that it is projected by the ESRI to rise to over 6% by the end of the year to a nine year high;

noting that Ireland's ranking on the World Economic Forum's Global Competitiveness Index has fallen from 5th in 2000 to 22nd in 2007, primarily because of high costs and inflation and poor infrastructure;

concerned about the impact that the job losses at Allergan in Arklow, Merriot Radiators and Bulmers in Clonmel, Xerox and Lucent in Blanchardstown, the Burlington Hotel and Arnotts in Dublin, Hospira in Donegal, Portwest in Westport, Jacobs in Tallaght, Kingspan in Dungarvan, Abbott Laboratories in Galway, American Power Conversion in Castlebar, Grove Turkeys in Co. Monaghan, DawnMeats in Co. Roscommon, Oatfields in Letterkenny, Merriot in Tipperary, SFL Engineering and Slaney Meats in Kilkenny and Nexans in Athlone will have on the people affected, their families and the local economy; and

noting that these jobs have been lost and that the number of new jobs created has declined as a direct result of flawed Government policies, notably the stimulation of a debt-fuelled housing bubble that caused Ireland to lose economic competitiveness;

calls on the Government:

to restore competitiveness by investing in infrastructure and by controlling inflation through wage moderation, increased competition in sheltered sectors of the economy, lower utility prices and real public sector reform to boost efficiency and productivity;

to support Small and Medium Enterprises (SMEs) as the engines of job growth by reducing red-tape by setting an ambitious target for reduction of the cost of regulatory compliance to business and by including ISME in the social partnership process;

to make a commitment that there will be no cutbacks or delays in delivering the National Development Plan, most notably crucial economic infrastructure such as broadband, inter-city motorways, ports, airport, public transport and education;

to initiate a national upskilling programme with the aim of upskilling 500,000 people over the next twelve years with annual targets set to assess progress;

to implement tangible policies that will transform Ireland into a knowledge economy by investing in next generation telecoms networks, accelerating eGovernment, assisting business to embrace new technology, raising education standards, increasing investment in information technology in schools; and

to promote greater involvement of immigrants in the economy by granting 'knowledge visas' to highly-skilled workers from overseas and by relaxing the restrictions on 291 immigrants who want to set up a business."

I wish to share time with Deputies O'Mahony, Feighan, Bannon, Doyle, Carey and Ring.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

Is that agreed? Agreed.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

In a debate on competitiveness last December, the Minister for Enterprise, Trade and Employment, Deputy Micheál Martin, told us the best test of a Government's policies was the ability of the economy to retain and create new jobs. I agree with that assessment and if the current Minister and Government are to be judged by their own criteria, their economic enterprise and employment policies have been an abysmal failure. The Ministers for Finance and Enterprise, Trade and Employment, were given the job of managing our economy following the Cabinet reshuffle of 2004. Since then, however, 20,065 people have been added to the live register and the standardised unemployment rate, the best measure of unemployment, has risen to 5.2%. The contrast with the Minister's forebears, Deputy Mary Harney and Deputy Richard Bruton, is stark. Those two people managed to move 100,000 people from the dole queues into work. On Friday the Central Statistics Office will publish figures which are likely to show that the standardised unemployment rate will exceed that of the United Kingdom for the first time in almost a decade. However, it appears clear that the figures are going to get much worse. The Department of Finance has projected that the live register will break the psychological figure of 200,000 by the middle of the year. The standardised unemployment rate will exceed 5.6% by Christmas and if the ESRI is to be believed, will reach as much as 6% by the end of the year. In terms of new jobs the Government's own estimates suggest that employment growth will fall to 1% this year and other economists and the ESRI has suggested that we may have no job growth at all. In recent months jobs have been lost in Allergan in Arklow; Merriot and Bulmers in Clonmel; Xerox and Lucent in my constituency of Blanchardstown; the Burlington Hotel and Arnotts in Dublin, to name a few; Portwest in Westport; Jacob's in Tallaght; Kingspan in Dungarvan; Abbott Laboratories in Galway; American Power in Castlebar; Grove Turkeys in County Monaghan; Dawn Meats in County Roscommon; Oatfields in Letterkenny; SFL Engineering and Slaney Meats in Kilkenny and Nexans in Athlone. These job losses will have a profoundly negative effect on the local economy and on the individuals and families affected. Some of my colleagues will speak on this aspect later in the debate.

The Minister, no doubt, will use his speech to give us a history lesson. He will tell us about the economic progress that has been made since his party came to office in 1997. He will seek to convince us that the Celtic tiger and the economic benefits that came with it were achievements of Fianna Fáil but this is not true. I do not think the House needs a history lesson or a debate on history. The economic success which this country has enjoyed in recent years came about for a multitude of reasons. The establishment of the Industrial Development Authority was opposed by Seán Lemass, who promised its abolition if returned to Government. Following Ireland's accession to the European Union under Jack Lynch and the succeeding years when Charles Haughey plundered the public finances and plunged Ireland into recession, the task of restoring the public finances to relative health fell to Alan Dukes as Minister for Finance. These tough and unpopular decisions brought public spending, Exchequer borrowing and the balance of payments deficit under control. The Tallaght strategy enabled Ray MacSharry to continue these policies and during these years we began to see the green shoots of recovery appear. The Single European Act opened European markets to Irish business and the Rainbow coalition's successful navigation of Ireland's entry into economic and monetary union allowed us break free from sterling and the constant fear of currency instability and devaluation.

The social partnership system has allowed unions, farmers and business to buy into the economic reform process, exchanging confrontation for engagement and nominal pay hikes for real improvements in take-home pay through tax cuts and pay increases. Under the rainbow Government, Ruairí Quinn balanced the budget for the first time in decades and as any independent analysis will show, that Fine Gael-led Government remains unsurpassed by any of the three Fianna Fáil Governments that have followed, in terms of economic growth, the control of inflation and our export and productivity performance. Over the past ten years, the three Ahern Governments, or perhaps the Cowen-Ahern Government, have benefited hugely from the decision made by all parties and none in the years gone by. The Celtic tiger is an achievement that belongs to all of us and was certainly not the creation of one party nor of one man.

This debate is not about the past but it is about the present and more important, it is about the future. Ireland is currently facing into its sharpest downturn in 25 years. Unemployment is rising at a faster rate than at any time in a quarter of a century. The public finances have gone from surplus to deficit at an alarming rate for which there is no historic precedent. Our economy is in serious trouble but the Cabinet will not take its head out of the sand. The Taoiseach would have us believe, to use his words, that we are facing into "a hard year" as a result of the global credit crunch brought on by the sub-prime crisis in the United States. The Tánaiste would have us believe that the dramatic downturn in construction activity is a "healthy correction" in the housing market and that the "fundamentals of our economy are at the strongest for ten years". None of this stands up to scrutiny.

Countless countries have been affected by the credit crunch but few are slipping as badly as Ireland. The rate of economic growth in Ireland is projected to be as little as 1% in 2008 yet other economies in the world continue to prosper. I refer to anticipated growth figures for other countries including China at 9.8%; India, 7.8%; Russia, 7%; Poland, 5.1%; Australia, 3.3%; Czech Republic, 4.7%; Norway, 2.9%; Turkey, 3.7%; and Argentina, 5.5%. Crucially, the growth rate in our knowledge economy competitors include Singapore, 4.4%; South Korea, 4.4%; Hong Kong, 4%; Hungary, 3.6%; and Israel, 3.7%.

This new reality is also evident when it comes to unemployment. The figures show that Ireland is rapidly moving from the premier division when it comes to high employment and low unemployment and back into the league of middle to high unemployment. We have already overtaken the United States on 4.8%, Austria on 4.2%, Denmark on 2.2% and the Netherlands on 4.1%. I expect the figures on Friday will show that we will overtake the United Kingdom, Canada, Italy, the Czech Republic and Sweden by the end of the year.

The Government might accuse us of talking the economy down but there is nothing more worrying than a Government that will not take its head out of the sand or its head out of the clouds. Unemployment is the human cost of economic mismanagement and notwithstanding the problems created by the downturn in the American economy, our economic slump is largely of the Government's own making. Like an old-fashioned tax and spend socialist, Deputy Brian Cowen has allowed public spending to spiral out of control. Billions of euro have been thrown at health, education and justice and 178 new quangos, without any real reform, any improvement in public services, any performance targets, any efficiencies or any requirement that taxpayers' money should be used for their benefit. Spending has increased by 11 .5% on average, 40% more than the rate of growth. This reversion to the economics of the 1970s has resulted in current spending rising from 25% of GNP to 31% and taxation from 32.5% to 36% in the past six years. There have been higher taxes and higher inflation but no improvement in services.

The Government has run away from the challenge of public sector reform, most obviously by its decision to accept the recommendations of the review body on higher remuneration. By the end of the year, Deputies Brian Cowen and Micheál Martin will earn over twice the salary of US Secretary Paulson, their counterpart in the USA who manages the largest economy in the world.

Inflation has also been of the Government's creation and is the reason for a loss of competitiveness. In the past six years, inflation in Government-regulated services was 31%, three times the EU average, whereas in the competitive sectors it was 12.5%, which is less than the EU average. Since 2001, services regulated or directly provided by Government have accounted for half of all non-mortgage inflation yet nothing has been done to address this. No progress has been made towards deregulation of bus services. There has been no separation of EirGrid from ESB, no overhaul of the telecoms sector, no independent regulator for waste management, no moves to tear down barriers to entry or uncompetitive practices in the professions and a carte blanche to NRA to increase tolling on the nationalised West Link. Where a private company, NTR, was running the West Link toll bridge, it will now be nationalised and cost the country even more under a State monopoly. As the economy falters,the Government's response seems to be to postpone, not accelerate, reforms. There are no decisions, no Ministers, no Government.

The cost of doing business and living in Ireland has soared. According to the Central Bank, our cost competitiveness against our trading partners has deteriorated by 30% since 2000, driving a range of manufacturing industries to the wall. For key business costs like waste, electricity, local charges, mobile phones, office rental, Ireland is now way out of line with the UK and other competitor countries. The common theme behind these cost burdens is a Government that has been unwilling to drive service sector competition and efficiency improvements. According to Forfás and the National Competitiveness Council, Dublin is ranked as the third and most expensive of 14 cities in which to invest when it comes to telecommunications, fund administration and biotechnology and the fourth most expensive for medical technologies, engineering and pharmaceuticals.

We in Fine Gael believe that the time for wake-up calls has long since passed. We need a Government that is prepared to govern and Ministers who will make decisions and drive change.

We must continue to invest in infrastructure and education so our economy will have the capacity to grow and develop in the future. We must bring inflation under control through productivity-related pay increases, greater competition in sheltered sectors of the economy and real public sector reform to boost efficiency and productivity. We should support small and medium enterprises, the engines of job growth, by reducing red tape and setting an ambitious target for reduction of the cost of regulatory compliance to business, a target that still has not been set by the Minister, despite commitments to do so almost five months ago.

We must overhaul FÁS and initiate a national upskilling programme with the aim of upskilling 500,000 people in the next 12 years with annual progress targets to assess whether this policy is being delivered. Instead of paying lip service to the knowledge economy we need to start implementing tangible policies that will transform Ireland into a knowledge economy by investing in next generation networks, accelerating e-government, raising education standards rather than ignoring that issue, increasing investment in IT and extending the research and development tax credit.

We need to promote greater involvement of immigrants in the economy, who face huge barriers when they wish to set up businesses, and grant knowledge visas to highly skilled workers from overseas to enable us to benefit from a brain gain in contrast to the brain drain we suffered in previous decades.

While Fianna Fáil can take its fair share of credit for Ireland's economic transformation, the Celtic tiger was certainly not the creation of one party or one man. However, the Tánaiste and the Minister, Deputy Martin, have nothing to be proud of when it comes to their time as economic helmsmen. As stated in the motion, we have witnessed a period where the largest surplus has been turned into the largest deficit, 20,000 more people have been added to the dole queues and ours is among the highest inflation rate in Europe.

The time has come for the Government to take its head out of the sand and embark on the long and difficult process of implementing sound policies that will restore our competitiveness and reverse the rising tide of unemployment. If it does not, Fine Gael is ready to take over the reins of Government and will do so.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context

I am glad to have the opportunity to speak on this Fine Gael Private Members' motion and I commend Deputy Varadkar on bringing it forward.

It is only nine months since the Government told anyone who wanted to listen that the boom times would continue into the future and that the country needed its steady hand to guide it. We now know that the real truth is different. A few months later, we know that the property boom is well and truly over, unemployment and inflation are increasing and we are rapidly losing our competitiveness when compared to our European neighbours.

What is making our economy particularly vulnerable is that the expansion in the early part of this decade was based on unsustainable, debt-driven growth in construction and public services whereas the good times in the 1990s were export-led and productivity-led. Ireland now has the most highly indebted households of any EU member state. The excuse is often trotted out that our rising inflation is due to external factors such as higher energy costs and the like, but it must be remembered that our strong euro against the dollar has cushioned us to a great extent in this area. According to CSO data, 53% of inflation since 2002 in Ireland has been caused by indirect increases and price rises in Government administered and regulated services. What is needed as a response to our deteriorating situation is to expedite the development of our country's national infrastructure, particularly in communications and transport.

Competitiveness and, therefore, jobs are directly affected by the snail's pace roll-out of broadband here. Widespread availability of broadband would attract equal opportunities for businesses throughout the length and breadth of the country to compete for jobs, particularly in rural areas that are seriously disadvantaged because of poor physical infrastructure.

Recently I heard that a person who had relocated to a rural village in Mayo from England for a better lifestyle is considering moving back to England as a result of losing contracts because broadband is not available there. We seem more intent on stopping rural dwellers cutting turf on bogs than supporting them in business. We will not let them carry on doing what they have done for hundreds of years but we are preventing them from moving into modern times. The Government cannot have it both ways.

There is no reason this country should be in its current position. The profits of the good times have been squandered while our physical infrastructure is nowhere near the standard needed. In Mayo we are looking into the distance for the completion of the N26, N5 and many other routes. Work on the western rail corridor is moving at a snail's pace and Ireland West Airport in Knock needs increased support as it has enormous potential.

My region is suffering mounting job losses in Portwest in Westport, Dawn Meats in Ballaghaderreen, Contract 4 call centre in Achill and APC in Castlebar, an industry brought to the town by Deputy Kenny many years ago. If we are serious about arresting the current downturn in the economy, the delays and cutbacks in the implementation of our major infrastructural projects must be stopped. We need them now more than ever. In many cases it is not that the money is not there. For instance, the Minister, Deputy Ryan, transferred €10 million from funds intended for broadband investment.

As I was driving to the Dáil this morning, I got a telephone call from a person who has a company based in Mayo which went into liquidation in the past few days resulting in the loss of 20 jobs locally and many more jobs countrywide and in other countries. These people need to know that the economic climate is being created here with the necessary business support structure to prevent a bad situation turning into a crisis. We need action now. I strongly commend this motion to the House.

Frank Feighan (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

I also commend this Private Members' motion to the House. The fact that the largest ever increases in the number of people on the live register were recorded in January and February of this year signals that a crisis is looming. The construction boom of the past seven or eight years has come to an end and that is causing great problems in rural areas. The live register figures would be much higher were it not for the fact that, as openly admitted by the Polish ambassador who visited this House today, most Polish construction workers have moved to the UK where there are jobs. Thankfully, once again the UK is acting as an escape valve for people from this country.

Irish workers need to be upskilled. Major job opportunities are not available to them. As Deputy O'Mahony said, broadband access is required in the smaller towns and not only in the so-called hubs and gateways. Smaller towns have their own identity and we need to support the development of small and medium-sized enterprises as the engines of job growth there.

Companies have to cope with considerable red tape. A constituent contacted me today concerning a safe certificate which he had obtained in Australia but on returning here found it was not recognised. He has spent five weeks waiting to do such a course, although he has the offer of employment. A safe course here costs five times more than a similar course in Australia. I tabled a question on that aspect to the Minister today and I look forward to a reply to it. The layers of red tape with which small and medium-sized industries have to cope is a matter of concern. That aspect must be addressed.

We are all in this together in that we are all trying to create jobs. I travelled to Scotland in the past six months to encourage a call firm to locate in my town in the west. It has considered locating in the west where there are major opportunities in that it is a good place to live, there is a good standard of education and people there enjoy a good quality of life.

I compliment Enterprise Ireland and the people working on its behalf, but we need to attract small and medium-sized enterprises to locate in towns such as my town and other towns like it in my constituency of Roscommon-South Leitrim. Such industries create part of the identity of an area and help it to develop.

The announcement of new companies creating 1,000 jobs were welcome but we now need to focus much more on companies creating 50 to 100 jobs, which give an area an identity and help those areas where the building industry will no longer be prevalent for the next few years. The aspect on which we need to focus is on supporting small and medium-sized enterprises. They need much more assistance and for the Government to address the level of red tape imposed. Otherwise the number of people unemployed will rise. There is a crisis and, as we are all in this together, we must ensure we solve it.

James Bannon (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context

I support this motion which highlights the rising level of unemployment that is threatening our economic viability. A staggering 187,000 are currently on the live register, of whom 16,300 account for the huge increases in January and February of this year — that figure is expected to be higher when the March figures are published on Friday. This is indicative of the rapidly increasing level of unemployment throughout the country, which is hitting every community. In my constituency of Longford-Westmeath, a devastating blow was dealt with the closure of Nexans Ireland. Ninety-six jobs were lost and workers and their families who have been associated with the company for many years were devastated. I call on the Minister to ensure retraining is put in place for these workers, who are facing an extremely uncertain future, and that a generous redundancy package is secured.

What efforts did the Minister make to save these jobs in Athlone and how does he propose to attract new jobs to the midlands? Only three companies have moved into the midlands in the past ten years and new investment is urgently needed. The re-investment of €30 million in C&D Foods in County Longford is welcome, but much more needs to be done to attract new jobs to the area. Announcements such as that in regard to Nexans Ireland are shockingly common and are an indictment of the Government's failure to tackle spiralling business costs and falling competitiveness. Basic costs must be addressed so that businesses are not forced to move out of Ireland to retain a competitive edge.

Ireland's economic competitiveness has fallen 17 points since the Minister, Deputy Martin, came into office. The standardised unemployment rate now stands at 5.2% nationally, the highest level in seven years, and is predicted to rise by more than 6% to a nine-year high by the end of the year. As a representative of a rural constituency, I am only too aware that the direct impact of job losses is most strongly felt in the farming sector. Farmers are being driven off the land and out of the industry by falling prices, lack of guaranteed markets and the excessive bureaucracy brought about by the Minister for Agriculture, Fisheries and Food. In recent years, Longford-Westmeath has seen job losses of almost 150 at the Lakeland Group, which followed as a direct result of the Government's failure to maintain adequate price structures and support for farmers. The cattle markets in Edgeworthstown, Mullingar and Moate have closed and other enterprises are under threat.

If it is to increase employment opportunities in the farming sector and retain workers on the land, the Government must provide the best possible education and upskilling opportunities for farmers. This is the key to providing agriculture with a competitive advantage. The midland counties are starved of infrastructural investment with a shameful underspend in BMW funding. However, this money seems to find its way back into the Exchequer each year and the Government persists in failing to meet its obligations to provide essential infrastructure and thus increase the attraction of these counties for investment.

Much could be done to improve rural development through prioritising high-potential projects. Longford-Westmeath, although perfectly situated in the centre of the country, is losing out on major international investment due to the poor state of its infrastructure. This infrastructural deficit is to the detriment of its economic development. It highlights the failure of the national spatial strategy, which is perhaps the largest scam perpetrated by the Government. Balanced regional development is a myth we have been sold by the Government as a reality. Longford-Westmeath is getting less than its fair share of State-assisted jobs — less than 2%. Employment can be created in this area by attracting new industry to Longford-Westmeath, creating off-farm and rural employment opportunities, providing additional funding to encourage indigenous industry, advancing the decentralisation programme and securing existing jobs.

Throughout the country, thousands of untrained workers were drawn into the construction industry during the boom years. Their futures have been dismissed by the Government as the big freeze in the economy begins to hit home and little provision has been made for their upskilling and retraining. The long-term sustainable pace of housing output is approximately 50,000 units per annum. From 2003 to 2006, this output was exceeded by a total of 120,000 units, an increase that could not be maintained. This explains the current decrease in construction industry activity and employment.

The Government is lacking an industrial strategy of low taxes and high skills. It deserves strong criticism for its part in facilitating encroaching inflation and lack of competitiveness. The Government has lost the plot and is failing to achieve and maintain a high rate of labour force participation, which is critical to the continuation of the economic strength that Ireland has experienced. Regions and rural areas are bearing the brunt of State-supported jobs being channelled into our largest cities. Such State support has failed to impact on the rural areas where it is most needed.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context

Somebody seems to have been dusting down speeches and mantras from five years ago on behalf of the Government. We heard all about the potential impact of global economic downturns after 11 September 2001. We are told, once again, that such global turbulence is responsible for the current downturn in our economy. Yet, when the situation improves, shrewd Government management will be credited.

In his Budget Statement last December, the Tánaiste and Minister for Finance acknowledged that we should expect more modest growth. He stated:

Against this background, my Department is forecasting that GDP will increase by 3% in real terms, 24,000 new jobs will be created with the total number at work increasing by a little over 1% and unemployment at 5.5% by the end of next year, inflation will ease and the harmonised index of consumer prices will average 2.4%.

Inflation currently stands at 4.8%. Anybody who predicted last December that inflation growth would be 2.4% must have intended to remove everything from the consumer price index. It was unrealistic then and it is even more unrealistic now. We have had predictions that unemployment will rise to 6% by the end of the year. If up-to-date figures were available, they would probably show it already at 5.5%.

I recently put down a parliamentary question to the Minister for Communications, Energy and Natural Resources on the roll-out of broadband. The bog standard response to queries about broadband provision is that it is a matter primarily for the private sector. The Minister tells us he is sorry but the decision was taken before he came to office. It is clear that the Government's commitment on broadband provision has been abandoned. This problem is widespread, in towns and rural areas, and there is no workable and realisable national broadband plan. It is critical that this infrastructure deficit be addressed immediately. It is a problem the Government cannot ignore.

I speak now with my food hat on. Significant and laudable effort is being put into promoting renewable energy. I would be pleased if as much effort were put into building jobs in food related employment. We must get serious about this natural resource instead of allowing it go down the swanny. At this morning's meeting of the Joint Committee on Agriculture, Fisheries and Food, representatives of the fishing industry told us that from the aquaculture point of view, 80% of the fish being landed is exported for processing before being brought back in. This is madness. Why can we not address such simple issues? Tourism is another natural resource. Nothing need be imported to enhance this resource but we are allowing the industry to become uncompetitive.

I was glad to see the Minister in my constituency in January when he said that Arklow was to be a priority location. The unemployment figure for Arklow in February rose by 20% purely on the basis of the loss of Allergen, the largest remaining employer. A taskforce similar to those established elsewhere in the State must be put in place. In Greystones, an 80-acre IDA site has been lying idle for some 20 years because the policy has been to secure one major employer. Smaller employers who were interested in coming in have been turned away. It is better to have a range of smaller employers so that the impact is not as great if one goes out of business.

I was asked in an interview on RTE last Wednesday week about the St. Patrick's Day access available to Ministers and representatives of the Government abroad. I hope each and every one of them, particularly the Minister, Deputy Martin, was listening to what was being said about why we are not getting the jobs, why jobs are leaving and why this country is not as attractive as it was ten or 15 years ago, when we were ahead of the game. We need to get ahead of the game again.

Joe Carey (Clare, Fine Gael)
Link to this: Individually | In context

Over the years, this Chamber has paused to take stock of where the economy is and where Deputies want it to go. For example, I refer to the efforts of the former Taoiseach, Seán Lemass, and Dr. T.K. Whitaker to open the Irish economy in the 1950s. Similarly, a former leader of my party, Alan Dukes, adopted the Tallaght strategy in the 1980s to help a minority Fianna Fáil Government to regain control of the public finances. It is time for further reflection of that nature if we are genuinely to plan for the future. The former Deputy, the late John Kelly, once said that the Irish economy is like a sow being slowly devoured by her piglets, who are gorging themselves with no thought of the future. This country has moved on from such rural imagery. Nowadays, we might say that the manner in which we are dealing with our economy reflects our obsession with style over substance — our desire for "quick fix" solutions. We think everything can be sorted out by means of cosmetic surgery, without any need to deal with the fundamentals.

Many Members have spoken about the job losses in their constituencies. There have been significant job losses in County Clare at Aer Lingus, Tyco Electronics, John Crane Limited and Thompson Financial. Some companies have put their workers on a three-day week because they are unsure of their futures. The number of people on the live register in the county increased from 4,249 to 5,072, or 19.4%, in the 12 months between February 2007 and February 2008. Such a rate of increase has not been seen for a long time. There is nothing to indicate the rate of unemployment, or the overall number of people on the dole, will abate in the near future. The region's economic balance was severely undermined by the Government's decision not to use its 25% stake in Aer Lingus to stop the recent transfer of Shannon Airport's Heathrow slots. The Government has walked away from the promise it made before last year's general election to allocate €53 million towards the well-being of the mid-west. That figure became €3 million overnight.

Presentation is of paramount importance for the Government. It does not engage in any analysis, consideration or planning of the future. Such an approach is fine in the short-term — from election to election — but when the Government's record is analysed by historians over the longer term, the conclusion that will be reached is that huge opportunities were squandered without anything to show for them. This country was fifth on the international competitiveness league table in 2000, but it had fallen to 22nd by 2007, primarily because of high costs, inflation and poor infrastructure. There has been a shift from economic growth driven by exports and productivity to domestically driven growth that depends on new jobs in construction and public services. The swift downturn in house building has had as significant an impact on the economy as the growth in construction some years ago. We have to pay for our public services from a dwindling income. The number of people working in the public service has increased by 160,000 since 2000, without a discernible improvement in service provision.

The Government needs to make an explicit commitment to introducing the necessary reforms that will ensure swifter delivery of national infrastructure projects, particularly communications projects such as the roll-out of broadband services and transport and education projects. The Government must move beyond its rhetoric about the knowledge economy to the development of an actual knowledge economy. This involves supporting investment in next generation broadband networks rather than merely maintaining its regulatory role. Small and medium sized enterprises can be the engines of job growth in our economy. Ireland needs to enter a new phase of economic growth, in which it regains its international competitiveness. If Ireland is to return to the forefront of international trade, we must display a commitment to promoting a competitive business environment, a responsive public sector and a political system that can make decisions. I support the motion before the House.

Michael Ring (Mayo, Fine Gael)
Link to this: Individually | In context

I want to say a few words about jobs in the west. It is not long since the Minister for Enterprise, Trade and Employment was in Westport for the launch of the brochure for the town's business park. I do not think a single job has been created in that park since that date. Similar problems are being encountered throughout the country. Nobody is going into these new business parks. The Minister and his Cabinet colleagues need to listen to people on the ground. The reason jobs are leaving this country is quite simple. The Government's failure to tackle problems like inflation is affecting the way people do business in this country. If the Minister talks to people who are involved in small businesses, they will tell him they are over-regulated by the Government, the EU, local authorities and the HSE. The Government has been in place for a long time, but it has done nothing about these problems, with which it is familiar. Every time local authorities try to raise funding for themselves, they do so by imposing additional costs on businesses. The local authorities were unable to deal with the refuse service, so they handed it over to the private sector in some cases although they held onto it in other cases. Business people have told me that it costs them a small fortune to get rid of their refuse.

As matters get more difficult, people are looking at their cost bases on a day-to-day basis. For example, the Portwest facility in Westport has relocated to China. Many enterprises do not want to do business in Westport or anywhere else in this country. The Allergan plant in Westport shed 800 jobs a number of years ago and a further 1,000 jobs are being lost at the company's Arklow facility. I am worried about the future of Allergan's 800 or 900 employees in Westport. As previous speakers have said, this country is dependent on industrial jobs. While Westport has a nice balance of industry and tourism, many of its eggs are in the Allergan basket. If anything happens those jobs, it will be devastating not only for Westport but also for the surrounding areas. Something has to be done. What has the Minister, Deputy Martin, done? What has the Minister for Finance done about this country's energy costs?

I will give a simple example of the hypocritical manner in which the Government is running this country. We have had an oil crisis for the last 12 months — oil has never been so expensive — but the Government has done nothing. It could have reduced its tax take to try to keep the price of energy down and keep this country's companies competitive. Many companies in Westport and other parts of the country are reviewing their operations to see whether they should stay in Ireland or move abroad. A company that has been based in this country for many years is targeting companies to see if they can be attracted out of this country and into cheaper bases in the Middle East and other areas. What are we doing about it? We are doing nothing. We are putting more pressure on employers and businesses. We are not doing anything. We have talked about it for 20 years. The small business committee that was set up in the Dáil made recommendations to the Government, but none of them was adopted by the Government.

We stood by when the good days were good and thought this day would never come. This dangerous day has come. If current trends continue, the 187,000 people who have been unemployed since last year will continue to suffer. We thought the good days would never come to an end. I ask the Minister, Deputy Martin, to try to support small businesses, which represent the backbone of our economy. They will stay here. The big supermarkets like Tesco which have come to Ireland over the last 20 years have got rid of jobs in small businesses in every town and city. Of course they have created a few jobs, but they have also taken a lot of other jobs. Small businesses are no longer able to compete. It is time for the Minister and the Government to try to support this country's small businesses. If a company from China or Taiwan looks for grant aid, the Government and IDA Ireland will do everything they can to bring them in. They do not want to do anything for Irish companies, however, because they are Irish. It does not matter if the company is from Dublin or Mayo. It is time to change the policy.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"—commends the Government on the successful management of the economy which has placed Ireland in the top 4 of the 27 EU Member States in terms of job creation and the second most competitive economy in the European Jobs and Growth Monitor;

notes that exports continue to grow, inward investment continues to strengthen and the pipeline of new business start-ups is strong;

confirms that Ireland is still one of the top ten competitive small economies in the world;

acknowledges that this performance has ensured rising living standards and improved quality of life for our citizens;

supports in particular the continuing strong performance in employment creation, solid management of the public finances, investment in infrastructure in the context of the National Development Plan and rate of inward investment;

recognises the Government's commitment to upskilling the workforce through its implementation of the National Skills Strategy;

acknowledges the successful filling of strategic skills gaps through the effective implementation of new employment permits arrangements including a new green card scheme;

acknowledges Ireland's success in job creation with now over 2.1 million people at work;

acknowledges the evidence of our continued competitiveness following the recent announcements by companies such as Genzyme, Zimmer, Green Isle, Lancaster, Service Source, DePuy, Citco, Equifax, IBM, Vistakon, Ivax-Teva;

notes the number of initiatives taken by Government to strengthen national competitiveness and which will underpin future economic growth including the implementation of the recommendations of the Small Business Forum, the Better Regulation Forum, the Expert Group on Future Skills, the Enterprise Strategy Group, and the High Level Group on Manufacturing;

supports the Government's commitment to make Ireland a leading knowledge and innovation economy and the achievements of the Strategy for Science Technology and Innovation which will strengthen further our performance taking into account the emergence of competition from the new and emerging economies including India and China; and

welcomes the recent reports on Ireland's Implementation of the Lisbon Strategy for jobs and growth which has been positively received by the EU Commission."

I welcome the opportunity to address the House on this subject and to recall and articulate the substantial achievement of modern Ireland in transforming the economy and increasing competitiveness. I note Deputy Varadkar asked that we not indulge in giving a history lesson tonight. He then proceeded to give a very unusual version of history, criticising the great Seán Lemass, who is widely regarded by historians as the architect of a modern, open, export-led economy. He moved quickly through the barren years that Fine Gael had spent in Opposition seeking to convince the House that this was the period which actually turned the economy around. We shall leave that to historians to discuss, perhaps, at a later date.

We need balance and perspective in terms of our assessment of the economy. We are very clear as regards both our achievements and, indeed, the challenges of the future. I shall reiterate to the House that the Government's objective is to build and protect employment. That has been at the top of our agenda for the last ten years. For Deputy Ring or anybody else to say it has not, is pure nonsense. The reality is that the employment performance of the last decade has been extraordinary. Even in 2007 alone, more than 80,000 jobs were created, an extraordinary amount.

Michael Ring (Mayo, Fine Gael)
Link to this: Individually | In context

The Minister is seeking to disguise the fact, in talking about the existing companies, that they are taking on no one.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

With respect, those are the facts. The number of jobs created in the last three years is very significant. We have moved from a workforce of one million, 12 years ago, to more than two million now. Yet all the debate and the rhetoric would suggest none of that happened and that it was all a mirage. We need some reality and perspective. I certainly accept reasoned debate as regards the challenges that we face globally and domestically, because Ireland is now a different economy from what it was ten years ago — or when Fine Gael was last in office. I accept that when Fine Gael was last in office, during difficult times, there were very few jobs to compensate for those that were lost. However, in recent times we have been able to create jobs and through our policies to create the environment to facilitate job creation, both indigenously and through foreign direct investment. Neither can any responsible Government pretend that no company will every close, that there will not be economic churn, or that jobs will never be lost. Jobs will continue to be lost in certain sectors and we have to win them in others. That is the challenge Ireland faces as a country. We cannot stand apart, either, from global shifts and movements. Globally, the past ten to 15 years has been a dramatic time. I noted that a majority in the long list of countries cited by Deputy Varadkar were what we would term emerging economies — in terms of China, India, the eastern European economies and many more. The Government will continue to work to replace jobs and, above all, to equip people with the necessary skills to deliver employment opportunities.

There is no basis for complacency about the economy and we shall remain vigilant. We shall continue to invest in the critical areas in the context of the national development plan. I would caution the Opposition, however, against dismissing the underlying strength of the economy and ignoring the major new job creation that has occurred over the decade which means the economy is a on a different plateau relative to where it was ten years ago. To refuse to acknowledge the positive structural changes in the economy in the last decade is to completely opt out of constructive debate. That is Fine Gael's choice, but it is not ours on this side of the House.

I do not wish to get into a negative type of debate this evening. That appears to have marked quite a number of the opening speeches we have heard in this debate. We want to work on policies that will position the country to take advantage of global upturns in the months and years to come. The reality is that the strength and resilience of the economy has enabled us to dramatically raise living standards and improve life chances for our citizens. In these two areas our record of achievement is beyond question. The United Nations ranked Ireland as No. 4 on the OECD's quality of life index in 2007 and we now have one of the highest per capita income levels in the European Union. We have a well educated workforce, and an environment which encourages work and entrepreneurship. We have already embarked on the next phase of economic development with unprecedented levels of investment in science, infrastructure and skills.

Let no one talk to me about paying lip service to science and technology. I recall when I was Minister for Education in 1997 that the Department's budget for research was nil. It has restarted the PRTLI programme and it was this Government that started the Science Foundation Ireland programme, which in an unprecedented way catapulted research to a primary position within the political agenda. It has invested hugely in the physical capacity of fourth level and in programming funding for science, particularly in terms of biotechnology and ICTs, the two fundamental pillars of Science Foundation Ireland. We continue to do that and last year we published an all-embracing comprehensive science technology innovation strategy, which will have an €8.2 billion budget under the national development plan. That is, again, to effect a quantum leap forward in terms of our performance in research and development, and ultimately is a key pillar underpinning competitiveness into the future, in terms we can maintain as regards jobs in high-end manufacturing, services and across a whole range of other areas.

The profile of employment has changed. We now have more and better paying jobs. We have a growing services sector, with a very strong exports performance. That is an aspect of the economy which has not been profiled, perhaps, to the extent it should have been. It has been getting some attention, however, in terms of the dramatic growth in services in recent times. Clearly, there are external challenges to be faced, not least as regards the whole financial situation internationally, liquidity issues and the difficulties in both the US and UK economies, which are two significant markets for Ireland. Ireland's growth rate will clearly moderate this year, but let us not forget that GDP expanded at an annual average rate of about 6.5% over the period 1997-2007, and this has facilitated a substantial improvement in living standards. Only last month the Lisbon Council in Brussels and the Centre for European Reform ranked Ireland highly in their annual reports, reporting a strengthened performance on the previous year. They noted that Ireland's growth potential was far from exhausted. The 2007 business environment ranking of The Economist intelligence unit placed Ireland in tenth place globally, out of 82 countries, naming it as one of the most attractive business locations in the world.

In the World Economic Forum, WEF, ranking Ireland has dropped in position from the stellar heights of 2000 when we had super national growth rates. The growth rates of over 6.5% could not be sustained on an ongoing basis, yet we are still ranked among the top ten smaller economies in the world. I also want to mention the capital access index, CAI, drawn up by the Milken Institute, based in Santa Monica. This is a publicly supported independent US economic think tank, whose capital access index scores the ability of entrepreneurs to gain access to financial capital in countries across the globe. The CAI measures the breadth, depth and vitality of capital markets and also openness in providing access without discrimination — a measure of global progress in the democratisation of capital. The 2007 index ranks 122 countries based on macro-economic and institutional environment, financial and banking institutions, international funding, bond and equity market development and alternative capital sources. Again, the key point is that Ireland has performed well, securing sixth place overall in 2007 — an improvement on the 2005 and 2006 rankings of tenth and ninth place, respectively. Ireland also tops the ranking for financial and banking institutions — based on the level of involvement of deposit-taking institutions in financing businesses. Our achievement in this domain is reflected not only in the effectiveness of our banking institutions but also in the Government initiative through Enterprise Ireland, namely, the access to venture capital scheme. That is a practical measure we decided on more than two years ago, which seeded the 2007-12 venture capital programme. The Government, through Enterprise Ireland, injected a new round of €175 million in venture capital funding and to date this has leveraged about €560 million of the funding being raised against a target of €860 million over that period to 2012 — and many of the funds have been established. When this is combined with some of the budget initiatives we introduced in terms of small business, we are making a difference to the capacity of indigenous enterprise to access venture capital.

I am not saying we are finished yet. We are looking at new opportunities for enhancing that access to venture capital in this country into the future. In terms of Ireland's trade performance, the value of our merchandise exports in 2007 reached €88.6 billion, up €1.8 billion on 2006, equivalent to a 2.1% rise. I noted earlier that services is a key sector. It has risen dramatically between 2003-07, from about €37.1 billion to €64.7 billion, an increase of nearly 75%. It has been an extraordinary story and the value of services exports represents about 42% of our total export trade now, and is growing. Some economists estimate that it will reach 50% by 2010-11. Again, in terms of the future, we have put together a working group to look at the services sector in this country and how it may more effectively be internationalised, and enhance its contribution to Ireland's economic growth.

We have made provision in the budget to account for the economic growth rate but global uncertainty will affect the projections of economic growth. We are not immune from global developments. It is important that we focus on the fundamentals of the Irish economy, which remain sound and which will shore up our capacity to respond to the challenges that exist.

The slowdown in the domestic housing and construction sector has been a significant factor in the moderation of growth this year. We are moving towards a more sustainable level of house building. We could not have continued to build over 90,000 houses every year. Approximately 48,000 houses are expected to be built in 2008. This does not represent a collapse but indicates a significant move back from 90,000. It presents an opportunity to refocus capital and funding on enterprise, new technology companies and value-added food companies, as has been stated. We will work on this through Enterprise Ireland with a view to convincing people to invest in new enterprises. We must be honest about the fact that the property sector in recent years was drawing an increasing amount of capital away from other productive sectors of the economy.

The good news that arises from the considerable activity in the construction sector is that we have witnessed the growth of a significant number of high-quality construction companies. The challenge for us now is to internationalise some of these companies, export construction products and services and avail of the various opportunities that present themselves, such as the Olympic Games in London in 2012. The international business community will be looking for professional services that our construction sector should be well placed to provide.

We believe our medium-term growth prospects remain favourable. The Minister for Finance has made it clear we will keep an eye on the public finances, which process we have already begun in the context of the most recent budget by way of ensuring that fiscal measures will remain a core part of our overall strategy. Current spending will rise moderately this year.

Deputy Varadkar indicated he wants further curbing of public expenditure. He clearly wants to slash it but we believe that rather than adopting a slash-and-burn approach, we need to moderate current expenditure and not decrease capital expenditure. Capital expenditure will increase by approximately 12% this year and it will be used to deliver on the national development plan across all the areas of infrastructure.

This year will be different to last year in terms of employment. We will not enjoy the same level of employment growth as last year. We have forecast this and said so at the beginning of the year in light of the budget forecasts. Over recent years, there has been a significant churn in employment. The Opposition has mentioned various companies in this regard. We could also mention companies that have been established in the past two to three years. Only yesterday I was in Dungarvan, where an American multinational, Lancaster Laboratories, has decided to locate so as to have a footprint in Europe. It took over an indigenous company that has been in the region since 1986. There are currently 100 jobs and 100 more are to be created.

Genzyme, a major biotechnology company in Waterford, is to spend a further €113 million and increase its employment level in Waterford to above 600. Earlier this week I visited Thermo King in Galway, where a research and development centre has been established, again with a view to underpinning manufacturing jobs. The technology available in Thermo King to produce next-generation green refrigeration products for trucks is probably the best around. It is extraordinary. The company is a subsidiary of one of the most successful companies in Europe, Ingersoll Rand.

We need to celebrate and talk up our technology a little more. We can overdo the gloom and negativity in respect of the Irish economy and its performance. Zimmer Holdings, one of the most renowned manufacturers of medical devices for joints, including knee joints, which we will all need at some stage, is to locate in Shannon in County Clare, thus creating 250 high-quality jobs.

Investments have been made by Vistakon in Limerick, a great company that manufactures contact lenses. ChannelAdvisor Corporation has also announced jobs in Limerick. Jobs have also been created by Citco Fund Services in Cork and Service Source Europe in Dublin. Teva Pharmaceutical Industries has created jobs recently, again in Waterford. IBM has decided to establish Europe's first cloud computing centre with the support of IDA Ireland in Mulhuddart. We are therefore going up the value chain and targeting companies, mandates and functions that will make a difference.

I set up the small business forum to create a new focus on small business. There are 800,000 people working in small businesses in our economy, which represents almost 50% of private sector employment. We received a significant number of recommendations on this and we are clearly focusing on indigenous and small countries to develop and internationalise them.

I mentioned our commitment to science and technology, research and development and the €8.2 billion to be allocated in the coming years. The good news on this is that we are making very rapid progress. On human resources, the number of employed researchers has risen dramatically since 2000 in parallel with the strong increases in investment in research and development. The proportion of full-time adjusted equivalent researchers per 1,000 in employment has risen significantly and is now in line with the EU average and only slightly below the OECD average. The increase in the number of researchers, including principal researchers and their teams, to realise the goals of our investment will continue.

Reference was made to the brain gain. We are in the business of procuring skills and we have a migration policy that facilitates high skilled labourers, particularly world-class researchers to attract them into Ireland with good, interesting and well-funded projects. At the close of 2007, there were over 400 different companies collaborating with scientists supported by Science Foundation Ireland, SFI. Some 42% of SFI-backed scientists were collaborating with industry.

Enterprise Ireland, IDA Ireland and SFI all meet under a group called Technology Ireland and work in a cohesive way to develop research investments in collaboration with industry. We probably have a more flexible suite of offerings in terms of the synergies between industry and academia than many other countries. This is generating a lot of interest in the global research community. There is a lot on offer in Ireland through the funding of Science Foundation Ireland, the IDA and Enterprise Ireland. The challenge is to maintain this in terms of both indigenous industry and foreign direct investors. It is not a question of "either or" and we should not engage in the game of playing one off the other. There is a lot of foreign direct investment to be won. The task has become more challenging but we can still win a significant amount.

There is a link between foreign direct investment and indigenous enterprise in that many in the latter sector are supplying the former. Many of them are adding solutions to the multinational offering in terms of the quality of our technology.

I mentioned small business. The small business report listed many recommendations, which we have implemented. The Minister for Finance, in his budgets of 2006 and 2007 in particular, gave effect, in a very solid and effective way, to almost all the taxation recommendations contained in the report. We introduced the innovation voucher, for example, which represents a novel approach to enable micro-companies of four and five people to obtain grant aid from Enterprise Ireland to buy knowledge and expertise from colleges. To date, approximately 428 companies have received innovation vouchers. The interest of the companies in this initiative has been satisfactory. The business forum picked up the idea in Holland. It is a very useful way to encourage innovation and entrepreneurship across the economy. We also introduced a Tech-Check system, whereby we enable small companies to check that their technology is being used to the greatest effect. We are supporting companies in this regard.

Reference was made to regulation and the external audit. We did significant work to remove the audit burden from many small companies.

We are agreed on the issue of skills and we have devised and developed a national skills strategy. It sets out the most challenging upskilling target the country has ever set and will result in the upskilling of 500,000 workers between now and 2020. We have, through Skillnets and the FÁS one-step-up initiative, allocated significant resources over the past two to three years to dramatically change the level of engagement with existing workers and to enable existing workers to upskill.

Some 80% of all existing workers will be working in 20 years' time and our challenge is to enable them to gain an extra qualification while at work. That is a big challenge for education and training providers, but it is one that we are keen to deliver. The function of the Minister of State, Deputy Haughey, who is straddling both the Department of Education and Science and my Department, is to implement that skills strategy and to facilitate synergies between the two Departments in the future.

As the House will be aware, the Minister of State with responsibility for trade, Deputy McGuinness, has been active on the trade front and is particularly active on the WTO side. Mention was made of agriculture earlier. We are focused on the connection between agriculture, as a key sector in the economy in terms of job creation, and the value-added nature of the food industry, on which Enterprise Ireland is working flat out. Enterprise Ireland has a strong, proactive approach with food companies. I have been at many functions with the Minister for Agriculture, Fisheries and Food, Deputy Coughlan, and the Minister of State, Deputy McGuinness, related to the research and development activities of many of our food companies such as Glanbia and Dairygold in terms of the nutritional health-enhancing foods, which are dear to my heart as many of the Deputies will be aware. It is all about gaining increased market share.

John O'Donoghue (Kerry South, Ceann Comhairle)
Link to this: Individually | In context

Like us all.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I am glad to note that the Ceann Comhairle is heading that way.

Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context

We all are on board.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Economic migration is a challenging debate for us. I have brought in a green card system to facilitate the attraction of high-skilled persons with their families to this society. Only approximately 1,000 were facilitated last year since the scheme was introduced.

However, I am conscious it is not a popular message to send out. If we are serious about competitiveness, we must heed what multinationals such as Microsoft and Intel tell me when I visit, that the growing issue is procurement of skills and they will go where the skills are available. Due to the post-11 September 2001 scenario in the States, such companies are encountering significant difficulty accessing skills outside the US. Therefore, a properly managed migration policy is important and it is a factor. When one looks at Google in Ireland, for example, with 1,500 employees in Dublin and 43 language competencies, one begins to see the complex nature of the modern Irish economy. It is not one that lends itself to simplistic notions, one way or the other, and it creates its own challenges in terms of economic planning into the future. However, in terms of sustainable migration policy, we have developed a good framework in this country and it is a policy we worked on with Forfás, and the expert group on future skills needs, in terms of developing to meet skills deficits in a sustainable way regarding non-EU citizens coming into the country. It is a framework that will continue to help us attract foreign direct investment.

The foreign direct investment pipeline is still strong. We are focusing on certain areas, including high-end manufacturing, internationally traded services and areas such as financial services, pharmaceuticals, bio-pharmaceutical, technology companies, information communication technologies, space, etc. We are chasing existing clients to bring more mandates into the country and we are chasing new companies and asking them to consider locating in Ireland. I am only back from the States where I was with representatives of Enterprise Ireland and IDA Ireland. We are developing greater synergies between the two in respect of our trade missions.

Some 64% of investments in 2007 were located outside Dublin. Our corporation tax rate of 12.5% is critically important. This Government brought it down to 12.5%. In fairness, former Minister Charlie McCreevy took no prisoners when he did it. He was condemned and attacked at the time of that budget by certain politicians on the other side of the House but he was right to proceed with it because it has had an important bearing.

Employment in IDA Ireland companies accounts for approximately 136,000 jobs. The average salary from IDA supported investments in 2007 was almost €44,000 or 19% above the average industrial wage of €36,800, reflecting the higher quality and related higher skills of the new positions created by these investments. IDA Ireland supported companies paid €3 billion in corporation tax in 2007, accounting for 47% of the total corporation tax take of €6.7 billion.

I refer the House to a contribution penned by Alan Gray of Indecon to a recent competitiveness conference held at Farmleigh where he tracked American FDI investment in Ireland over the past six to seven years and the output. He outlined significant increases in the value of US investments in Ireland compared to 2000, giving the lie to the story that it is all over and ending. In terms of eastern Europe, we compare extremely favourably regarding both the value and volume of FDI emanating from the United States.

However, it is clearly more challenging. We will not be competing with China and India on wage rates. When a company such as Allergan moves to China or Costa Rica, there are certain areas in which we will not be competing. I do not think anyone in the House will suggest that we try to match the wages of China or Vietnam. We will not do that. Brain power and targeting certain key areas is the name of the game. We look at China and India as big markets to which our own companies may go to see what niches they can establish and what portion of the market share they can get.

We must watch our overall offering, such as cost competitiveness. We have no argument in that regard. This is a different economy now. It is a far more value-added economy and the cost of living here is higher than it was ten or 15 years ago. Therefore, we offer companies different value propositions, but we must ensure that the net package we offer is still beneficial and narrows the gap between ourselves and our competitors. That is the issue.

We must drive the Irish entrepreneurial story and really work behind quality Irish companies such as high-potential start-up companies and the scaling division of Enterprise Ireland, which selects companies with potential for growth and works with them actively on research and development, human resource, sales and marketing and management capability to drive them on. Some 30 CEOs from the companies in the scaling division went to Stanford University to do a leadership for growth programme sponsored by Enterprise Ireland. They are the kind of programmes that will make a difference to the growth of Irish companies in the future and we are clearly aware of the need for enhanced management capability on the indigenous side as well as sales and marketing.

The New York Times ran an article entitled "Ireland is alive with enthusiasm for entrepreneurship". In fact, I got a telephone call from The New York Times asking if I would give an interview about a company called Photo Nation Ireland Limited, which is based in Galway. It developed the technology, beloved of all politicians, which takes the red eye out when Deputy Ring is being photographed. The New York Times asked me quizzically how that technology originated in Ireland, of all places.

Michael Ring (Mayo, Fine Gael)
Link to this: Individually | In context

Would they do anything for hair?

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

There is a company developing something for the hair as well but the conservative within me is loath to chance it.

Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context

We will never get the Minister off the newspapers then.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

It cannot do miracles.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Deputy Varadkar mentioned Allergan. What happened in Arklow is extremely disappointing for the workers and all concerned. We will work hard to replace that and get in alternative employment.

It has a different operation in Mayo. Mayo is the sole manufacturing site for botox in the world. When I say botox, people should not think only of the face, etc. Botox is a remarkable drug which has approximately 20 applications. I have been to Allergan in the States. The pride and the performance of that company in Mayo, in terms of what they have managed to achieve, is outstanding.

Michael Ring (Mayo, Fine Gael)
Link to this: Individually | In context

It is a great company.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

It is an outstanding tribute to the management and staff there. Our challenge is to get an increased level of that type of activity in Ireland so that those locations become the key ones for global companies and that we retain our position.

The Minister for Communications, Energy and Natural Resources, Deputy Ryan, is working actively on the broadband issue. We have made extraordinary progress in the past two years from what I accept was a low base and there are considerable challenges on the broadband agenda, but I am confident. The Minister, Deputy Ryan's draft policy paper is currently being updated. He held a major forum on it recently. We will make considerable progress, particularly in terms of next generation broadband which is important.

We urge that it be a constructive debate, devoid of unnecessary political point scoring and negativity. It is in our interest to portray to the world that we acknowledge the challenges of the present day but are prepared to put in place the correct policy pillars to guarantee future employment and competitiveness in the economy.

Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context

I wish to share time with Deputy Martin Ferris and to provide ten minutes for Deputy Kathleen Lynch tomorrow.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

Is that agreed? Agreed.

Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context

I speak on behalf of the Labour Party which broadly supports the motion. However, some aspects of the motion are a cause of concern. I do not intend to engage in destructive argument, but I hope to be constructive in my contribution. It is important not to talk ourselves into a deeper recession than exists and we must acknowledge the strengths of the economy. We hope people will still find our economy attractive and will be willing to invest in it.

It is important we maintain the current taxation regime. I remind the Minister that it was Deputy Ruairí Quinn who negotiated the 12.5% and who left our first budget surplus in place. At the time we were creating 1,000 jobs a week. The economy was very strong when it was handed over to the Fianna Fáil regime. I read the comments made by the Minister for Finance on our taxation returns that we are €600 million out. He basically referred to all the ills that occurred in the international area and the associated risks. While issues such as credit and energy costs are relevant, it would be churlish of him and foolhardy of us not to admit that the Government has played a significant role in the current crisis. The Government cannot act like Pontius Pilate and wash its hands of responsibility for its input, particularly with regard to some of its taxation measures, both direct and indirect, which have placed significant impositions on areas of the economy and threatened their viability and existence.

In this context, ISME made a presentation to the Joint Committee on Enterprise, Trade and Employment, where it outlined much of the red tape and bureaucracy involved with regard to the significant amount of legislation in the taxation, health and safety and industrial relations areas. There are up to 1,000 items of legislation that must be addressed and taken into account by small businesses. I know from experience what a business involving three people must address. The bureaucracy is incredible and is a significant imposition. The quicker we streamline and regularise the position and minimise the bureaucracy, the better because we are strangled by the regulations.

The Minister is correct in saying that foreign direct investment is still very important for us. We must continue to articulate this. We have an excellent third level educational base and significant fourth level expertise and we must sell this aspect on world markets to remain competitive. However, we must not forget the indigenous small industry sector. This is particularly important in the rural context.

Almost ten years ago I attended an IRD conference in Kiltimagh, Mayo, where a man spoke about the creation of six to eight jobs in the telecottaging area. That was very important at the time. The availability of broadband is very important for the creation of such jobs. We cannot over-emphasise the importance of broadband availability in terms of competitiveness and the ability to be innovative, maintain communication with the outside world and create jobs. We want to create jobs that will not just be good for the people in the local area and economy but that will contribute to sustaining the area and to the development of infrastructure in those areas.

In this regard, the roll-out of broadband was a disaster. The Government, particularly the former Minister, Deputy Noel Dempsey, must take full responsibility for this. Broadband roll-out was a cock-up and it is wrong to say it was not. The companies in the market gravitated towards the urban areas where there were significant profits to be made and rural areas were left to wait. There are areas in Westmeath and Longford that are crying out for broadband. People want to be able to do business from home. Home-based businesses are important and provide an added impetus to competition. We need broadband to be rolled out to the rural areas that are without it. No area should be forgotten or isolated.

Start-up industries must also be encouraged. It is important that seed capital is available for such industries to provide them with an important boost. I watched the "Late Late Show" the other night on which two young men described how they had to go to Silicon Valley to make a success of their enterprise, all for the want of €20,000. Nobody wants to see young people with the brainpower to achieve what those two young men achieved having to leave the country for encouragement.

The Minister must inform Enterprise Ireland that taxpayers do not mind contributing €20,000 or €30,000 to get more young people like this up and going. We must get the vision right. If the two young people I saw on the "Late Late Show" could make €2.5 million or €3 million from selling their business, just imagine what can be achieved. One of the young lads I saw is now going to be one of the main executives in the company which bought their business. We should take note, as should the Minister for Education and Science, that one of these young lads bypassed the traditional educational route. I am a traditionalist at heart, but we must abandon our traditional attitudes and open up. If a young lad can achieve such success without a traditional education, it opens our eyes. He is the type of young person we need and he has shown us the way forward in this context.

I was shaken by Deputy Bannon's comment that the infrastructure in Longford and Westmeath was poor. He is not very long in the Dáil, but he was a while in the Seanad. I am very proud of the infrastructure in Westmeath. There are 75 acres marked down for an IDA Ireland park. I have spoken to the executive of IDA Ireland and I am glad to be able to say that it is pressing for movement on the construction of a 25,000 sq. ft. facility, for which tenders will be in next week and which will, hopefully, be built and opened by the end of the year. I do not mind who opens anything as long as someone does.

Westmeath also has tremendous infrastructure in terms of recreational facilities and roads, for example, the N4 and N6. The Athlone Institute of Technology is probably one of the most progressive institutes of technology. I have discussed the issue of industry with the AIT and advocated the provision of an industry for Mullingar, which is particularly important in the context of the IDA Ireland park. One facility will beget another. Once we get something in one area, whether services, technology or IT, we will get more in another. Just as a number of people in Athlone lost their jobs with Nexans, Mullingar had similar job casualties with the loss of Tarkett ten years ago. This happens, but when it does, we must try to put in place replacement industries. I have made that argument to IDA Ireland which listened carefully to me. Deputy Bannon must fight for the same in Longford, his area.

I remind the Minister that we have good infrastructure, but we need joined-up thinking from Government so that it will use some of the moneys available for transport to link the gateway towns of Athlone, Tullamore and Mullingar. We have the infrastructure in place and all we need is the moneys to open the routes, approximately €85 million to open the Athlone-Mullingar railway link and only €1 million to open the Killucan link, which would take people off the road and contribute to enhancement of the environment, quality of life and the reduction of carbon emissions. This would reflect joined-up thinking by Government and that is what is needed.

I strongly reject Deputy Bannon's implication that Longford-Westmeath lacks infrastructure. Our local authorities have fought hard alongside Government to put the necessary infrastructure in place. We should acknowledge that and not put on the poor mouth or béal bocht. We do not want to down-play what we have, but should go out and sell what it in a positive way.

The international crisis will affect us, but we do not know how it will play out and for how long. However, some of the current difficulties with our economy are of our own making. The main drag on the economy is the near collapse of the house building sector. The number of houses built in Ireland increased rapidly from 52,000 in 2001 to approximately 88,000 in 2006. We must remember now that for each reduction in the number of houses built, a job is lost. If we have 20,000 fewer houses, that is 20,000 fewer jobs. We have put too many eggs in the one basket, but hopefully we have learned something from that.

A national upskilling programme must be set in place quickly. We do not want theoretical barriers to that. As people lose jobs, they must not be left to stagnate, as happened in the 1980s. We want them involved in upskilling straight away. We must broaden our horizons in this regard. There must be no restrictions on the opportunity to upskill. For example, if young apprentices who are on their third or fourth study module fail an exam with FÁS, they can only repeat the exam twice. That does not happen with regard to university students, who get two or three runs at an exam. If that was the case, half the graduates that come out of universities would be excluded. One gets two or three runs at it and gets the opportunity again. Let us cut out that codology. If somebody is willing to spend four years there, let us give them the opportunity. We need upskilling straight away particularly given that there are threats to the manufacturing base. We must acknowledge that they are there and ensure that people are upskilled and trained appropriately so that they can go into other challenging areas, such as IT and services areas. This is what is going to be important and this is what the Labour Party will advocate quite strongly as we confront this crisis together because, after all, we all have a duty and obligation to ensure we work together in this area.

Martin Ferris (Kerry North, Sinn Fein)
Link to this: Individually | In context

I welcome this opportunity to address the Dáil on the increasingly worrying issue of unemployment and this Government's mismanagement of the economy. As a member of the Oireachtas Committee for Enterprise, Trade and Employment, my colleague, Deputy Arthur Morgan, recently undertook a visit to east Cork, Waterford and Tipperary to visit some of the State's worst job loss black spots. During that trip he, along with members of the Government parties, met with chambers of commerce, unions, workers, business people and community groups to establish what was or was not happening in these areas to bring about job creation.

The report compiled out of that trip is a damning indictment of this Government's ability to keep and create jobs in this State. Ten points were listed as being urgently needed to stimulate the local economy. They include a full roll-out of broadband, an investment in incubator units and research and development facilities, the provision of adequate funding to local authorities to help reduce rates on businesses, ensuring that decentralisation proceeds, making land affordable, greater co-operation between Government agencies, extending gas lines, building a fast and efficient road and rail infrastructure and making education and training a priority, with investment in third-level facilities and upskilling courses. These demands are not peculiar to that region. From my constituency of Kerry North, to Dublin, to Donegal and right across this State, we are lagging behind in infrastructure and skills.

This Government has been riding on the crest of an economic wave for the last ten years but what did it do with the surplus in our economy over that time? It allowed our economy to become almost completely dependant on an unviable construction sector and put in no provisions for when that sector would slow, as it is doing now. How foolish of a First World Government to invest everything in property. How little it must know of international markets and economic history.

After ten years of pushing this sector, what have we got? We have thousands of newly built houses with no road or rail infrastructure, not enough schools and no local community services. We have a Third World health service. We have no investment in the retraining of construction workers for alternative employment. Essentially, we have failed to provide any of the seven pillars that lead to increased ability to compete and we are running out of money to provide them.

The Government's short-sightedness and mismanagement of the economy can be seen in the promises made in the programme for Government, which include a reduction in PRSI. With unemployment on the rise, the social insurance fund is needed more than ever. Yet only last year, this Government wanted to slash contributions to it. As recently as two weeks ago, Government officials said significant additional funds would be needed to meet growing unemployment payments. The Government has yet to admit the folly of its PRSI plans.

While we agree with the sentiment of this Private Members' motion, we do not agree with some of the solutions put forward in it. Competitiveness will be restored if we invest in infrastructure but wage moderation alone cannot control inflation. Workers' rights cannot be the first point of call for sacrifice when we discuss competitiveness. In most countries which lie ahead of us in the competitiveness tables, workers' rights and conditions are protected as a content workforce is seen to contribute to a stable and successful economy. Lower wages are not an option when the cost of living in this State is so high.

I am also concerned at the reference to competition in sheltered sectors of the economy and public sector reform to boost efficiency and productivity. We had a State-run communications network and airline. They were opened to privatisation and we now have the worst broadband provision in Europe and vital flight routes are being pulled from rural airways because they are not considered sufficiently profitable. Workers' rights have been eroded and the threat of strikes is always present. The public health sector is in the process of being reformed to boost efficiency and productivity and, again, we have seen what an absolute disaster that has caused for the State. While I agree that our regulatory system is complicated and costly, we must be careful that in cutting some of the red tape, we do not create loopholes that can be exploited.

Unemployment in Kerry is a serious cause for concern, as I am sure the Ceann Comhairle can testify. The live register figures for February show there are over 1,000 more people signing on than there were 12 months ago. The bulk of this increase has come from a series of closures and lay offs in Listowel and Tralee, among them, Dennys, Tillitson and Swiss Wire in Tralee and Contact Four in Dingle. In February 2007, there were 1,069 people signing on in Listowel. This figure has increased to 1,385, an increase of more than 300. There were just over 3,178 people signing on in Tralee this time last year and that figure has increased to 3,500. The number in Killarney is 1,449. This makes these three towns among the worst in the country for unemployment and Kerry remains among the top three or four worst affected counties in the State. Over 8,000 people are now on the live register in Kerry, which is an increase of 1,125 on the figure for February of last year. This is despite the presence in successive Governments over the past 12 years of two Cabinet Ministers from the north and south of the county.

What is particularly worrying is that the loss of jobs in traditional manufacturing and processing is not being compensated for by new jobs. Time and again, I have raised the issue regarding the lack of new investment in Kerry and, in particular, the failure to capitalise on the presence of the institute of technology and the technology park. However, one of the factors I referred to earlier — the lack of broadband access in much of the county — is also clearly a factor in deterring such investment.

I have raised this issue with the IDA on numerous occasions and I appreciate that genuine efforts are being made to redress the situation. However, local people have little confidence in such reassurances in light of their most recent record and the frustration felt at the downscaling or ending of operations by some of the larger companies in the county. I, along with Deputy McEllistrim from the Government side and Deputy Deenihan, will meet with the IDA later this month to discuss the situation. All of us have worked together to try to bring about a situation where investment would come to the county and where the IDA would play a leading role. Unfortunately, the record over the past five years and even before that has shown that little or no attention has been paid to our county.

The slowdown in construction is also a factor, as is the issue of displacement and downward pressure on wages. For the first time in many years, I am hearing reports of tradesmen considering travelling to England to find work. I know of agencies which are trying to recruit local labour to work in London, particularly on the Olympic village. With the growing uncertainty facing construction workers, the availability of other employment is essential. The effects of this Government's over reliance on the construction industry and the property market are now becoming apparent. It is also worth noting that following the boom in the construction sector over the past eight years, we now have a situation where speculators have built houses which are then rented back to local authorities or Health Service Executive areas to house people on local authority housing lists. This is a clear sign of terrible mismanagement by the Government in its efforts to bring this about.

It is unfortunate that the Government did more to bolster the property sector than it did to assist indigenous enterprises in the past ten years. It has squandered the unprecedented wealth created, which could have been used to address the major infrastructural imbalance between east and west. For example, the lack of access to broadband in many parts of Kerry and many parts of our rural communities and the disgraceful lack of a proper road and rail infrastructure are consistently cited as obstacles to investment.