Tom Morrissey (Progressive Democrats)

I second this motion and I welcome the Minister of State to the House on the occasion of the first budget of this Government's second term in office. This prudent budget manages the Government finances, while assisting the less well-off in terms of increases in the old age pension, child benefit and other social welfare provisions. When today's increases are added to the increases of the last five years, one can see the enormous leap that has been taken by the Government in terms of the provision of social welfare.

The Progressive Democrats Party set out its manifesto for managing the economy before this year's general election. The document said that sound management of the public finances is absolutely essential, it pledged to ensure that there would be no borrowing to fund current Government spending and it promised that taxes would be kept low and employment high. We have seen dramatic improvements in the economy in the last five years as a result of such policies. Foreign direct investment has increased and, by keeping taxes low in today's budget, we have sent a signal that such investment will continue to arrive. It is to be hoped that jobs will continue to be created.

The purpose of today's budget was to create stability for the next few years and to calm the nerves of people, especially investors, after the events of the past 12 months. The Budget Statement, as outlined by the Minister for Finance in the Dáil today, has achieved these objectives to a great extent. Our policy of low taxation of business is the engine that has driven our economic success in the last five years. In spite of calls in recent weeks to retain the rate at 16%, corporation tax has been reduced to 12.5% today. This means that this country has committed itself to a low taxation regime and investors should continue to arrive here as a result. The Government finances have suffered greatly in the last 12 months as a consequence of low income tax receipts. Employment created by foreign direct investment is central to our economic fortunes and if such jobs dry up we will not have the tax receipts to pay for old age pensions, infrastructure or child benefit.