Shane Ross (Independent)

I find myself in agreement with virtually everything said by Senator Mansergh, bar his final remarks. My read on the situation is that despite his reservations about Deputy Rabbitte's intervention in the immigration issue, they would sit comfortably in the next Cabinet if all goes according to plan for both parties and I see no great difficulty in that.

I welcome the Minister to the House. There is a current mantra that it is a great time to be in Government and a difficult time to be in Opposition. The assumption behind that statement is that the Government is not responsible for the economic boom but that this has all happened by luck and that it is very frustrating for an Opposition to be attacking the Government sitting so prettily in the middle of this boom and benefiting from it. There is a certain amount of truth in the fact that both this Government and the previous Government who presided over this boom have had their share of luck to be in position at the right time. However, the Government deserves a great deal of credit for its behaviour during this boom. A boom can be blown pretty easily. One can lose the confidence of the international community and frighten away outside investors quite easily. One can make some disastrous decisions however lucky one is.

Whereas we have seen the highlighting of what are, in the global context, trivial mistakes, such as the controversy that arose this morning where the Opposition drew blood about the health service, in the overall management of the economy these are small beer. This Government has steered the economy particularly successfully and wisely in a situation where it could have, had it yielded to immediate political pressures at all times, blown the boom. It did not do that.

I will point out instances where the Government has played an extraordinarily successful role, for which it should get due credit. Senator Mansergh correctly highlighted the issue of the 12.5% corporate tax rate. There has been immense pressure from Europe to raise that tax rate and for the harmonisation of taxes. The Government has courageously resisted that pressure. It is self interest but there undoubtedly has been a great deal of pressure from France and other countries on this issue. The result of the Government's decision is the arrival of the multinationals to this country.

Furthermore, the trade union movement, with which the Taoiseach has an unhealthy affinity, has pressed for corporate tax to be increased to 15%, a rate which would cause eyebrows to raise in the United States and elsewhere. It would send the signal that we intend to resist the approaches of multinationals even though these have been the midwives of the boom. The Government has also introduced an income and capital gains tax regime which has attracted service, software and other industries from overseas.

Had there been different people in different positions and different parties with different philosophies in power, we could have raised corporate tax to 20%. In the rainbow coalition Government, Fine Gael found it impossible to reduce the top rate of income tax from 48% because of the Labour Party on its back. This Government and the former Minister for Finance reduced income tax, reduced capital gains tax to 20% and stuck stubbornly by the 12.5% corporate tax rate. Those were the most significant decisions in continuing to boost and maintain prosperity.

That is not a popular line to take. Implicit in my remarks is that the Irish indigenous industries are not responsible for the boom and that we must give the credit to the global economy and outside factors. That is true to a large extent. Despite what Senator Mansergh said about indigenous manufacturing industry, it has been in decline, as has farming. However, the response to that has been to quietly bite the bullet, acknowledge that fact and find a way out by inviting in foreign industries which will boost the economy.

It is difficult to say "thank you" to the United States, and it is not necessary to do so. However, it is necessary to acknowledge that without the entry of American companies in the economy, the boom would not have occurred. That is the principal explanation for the Irish economy outstripping its European colleagues so obviously and consistently. I am a little more simplistic than academics such as Senator Mansergh——