Brian Ó Domhnaill (Fianna Fail)

I am pleased we have been afforded the opportunity to express our views and concerns in regard to the pre-budget outlook. I welcome the Minister of State, Deputy Sargent, to the House. Cuirim fáilte roimhe. Tá a fhios agam go bhfuil suim mhór aige sa Ghaeilge fosta.

I welcome the decision taken by the Tánaiste and Minister for Finance, Deputy Cowen, as announced on 13 September, to put forward a unified budget. This is a positive development, particularly in regard to business development and economic growth. The cornerstone of recent budgets has been the development of a social justice policy and the maintenance of low, competitive rates of taxation. I was awed to hear Members on the other side of the House declare that the Government should reconsider its objectives of reducing taxation and helping workers by providing incentives to allow them to continue to work and thus fuel economic growth. It is vital we have a vibrant economy that allows us to look after the more vulnerable members of society. We must ensure the tax take continues to be strong into the future. I do not share the views expressed by Senator Doherty on his party's taxation policy, which would drive the country into bankruptcy.

I welcome the Minister's statement that he supports this opportunity for Members to put forward opinions on the forthcoming budget. As a Senator from the Border county of Donegal, I am particularly interested in the Government's review of the tax incentive schemes. I understand many of these schemes, including those relating to urban and rural renewal, are being phased out and are due to be terminated by July 2008. However, the Finance Act 2007 made special provision for the introduction of a new tax scheme aimed at encouraging the development of tourism infrastructure in the mid-Shannon region.

A town renewal scheme was introduced in Donegal in 2000. However, the scheme was restrictive, covering 217 sites in five specific towns. Of those sites, only 14 certificates have been issued to date. As such, this scheme was not entirely beneficial to the county. A new scheme must be introduced to encompass a positive incentive for business investment in Donegal, particularly in the manufacturing, farming, fishing and tourism industries. A clear incentive is required to assist those who create jobs in Donegal. Given the relatively poor economic climate in Donegal and other Border counties and the significant job losses we have experienced, the case is clear for a new tax incentive scheme to ignite, encourage and promote sustainable development.

This proposal for a Government intervention through the designation of a special tax incentive scheme for Donegal has been already prepared by Donegal County Council's planning and economic development special policy committee. It is made against the background of the sustained and exceptional performance of the economy, with low unemployment and high economic growth. The proposal is confined to County Donegal but I would welcome a wider tax incentive scheme that would encompass some of the other Border counties. These counties have significantly underperformed economically in comparison with the rest of the State. Government intervention is now required in Donegal to stimulate investment and economic activity, to redress the imbalance that exists and to support the Government's policy of balanced growth and development in the regions, as set out in the national spatial strategy in 2002.

Donegal has experienced significant job losses due to factory closures, including Fruit of the Loom, UNIFI, Hospira and Comer Yarns. Owing to their geographical location in proximity to the North, Donegal and other Border counties have suffered greatly as a result of the Northern conflict for some 30 years. It is imperative that the Government redress this situation now that the power-sharing institutions are up and running. It must avail of the opportunity in budget 2008 to introduce a special measure. Government intervention through a tax incentive would demonstrate its commitment to addressing Donegal's' economic difficulties and would be an important factor in kick-starting economic revitalisation in the area.

A special tax designation for Donegal would increase the county's attractiveness as a location for enterprise development, investment and job creation. This was proposed in the report of the interdepartmental group, chaired by the Department of Enterprise, Trade and Employment, which was published in July 2006. It would promote regionally balanced and sustainable development as outlined in the national spatial strategy.

I know there are many demands on the Tánaiste in specific areas. I welcome the move in 2007 to introduce a special tax incentive for the Shannon region, which I believe is working very effectively, having spoken to people in the region. The Tánaiste must be applauded for introducing such a measure.

I am of the very firm view that as we progress from the economic imbalance experienced in the Border counties, especially in Donegal, owing to the conflict, there is a golden opportunity to introduce a special dispensation for those counties to regain the jobs we lost. We could revitalise farming, tourism and the manufacturing sectors in Donegal and help those creating jobs in that area.

I would be grateful if the Minister of State, Deputy Sargent, would bring some of those proposals to the Tánaiste. It is important they be considered in the overall context of balanced regional development. If the Government is to be remembered for such balanced regional development, the Border counties and Donegal in particular will be looked at in five, six or seven years' time to see what dividends have been created. I know the Minister of State will do this and I thank him for coming to the House.