Dan Boyle (Green Party)

I welcome the Minister of State to the House. We served together on the Committee of Public Accounts for five years, during which we learned the value of spending public money wisely. While this is a virtue in the running of any business, unfortunately it is not always properly recognised in the expenditure of public moneys. I represent the Green Party which, through political discourse, has allowed itself to be portrayed as lacking knowledge of economics and failing to engage in economic debate. As my party's spokesperson on finance, I believe I have helped dispel this myth.

Another challenge for my party is to counter the view that the Green Party has little interaction or involvement with industry, especially small business. My party leader, the Minister for the Environment, Heritage and Local Government, Deputy John Gormley, ran a successful language school, an important service industry. Our deputy leader is still involved in running a chain of bookstores, while the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, ran a successful cycle tourism business.

I place myself in the same pantheon. To contest the industrial and commercial panel in the Seanad elections of 1997, I had to justify to the Clerk of the Seanad, who was a hard woman to convince in these matters, that I had a direct involvement in industry and commerce. I am a director of several companies involved in arts and environmental protection, which are limited by guarantee which means they are not trading entities. I was also a director of a charity shop for the Earthwatch organisation. This was a strange contradiction in terms in the sense that it provided low price goods to raise funds for a charity and did not make a profit. While it did not qualify as a business activity, the Clerk of the Seanad was somewhat lenient in accepting my nomination.

I raise these matters because I have gone on record since in other political and economic debates as a strong supporter of the teachings of Adam Smith who has been adopted as a guru by other political parties, especially those of the right. Adam Smith's writings contained strong warnings against the emergence of monopoly capitalism. The type of economic model he tried to promote was based on multiple small-scale businesses operating in the most local base possible. This is the essence of Green Party economic policy and sums up the type of economy we should strive to achieve.

The economy should have an appropriate level of foreign direct investment. It should not be so reliant on FDI that it is left open to what has been described in terms of currency fluctuations as an "asymmetric shock". The world economy is at a crossroads and we must ensure we have a strong indigenous economy that will survive with the least possible damage the impact of probable changes in the global economy. I would like to think measures are in place that help us deal with this. The contributions to this debate already, have talked about the need to foster the ethic of small businesses and to encourage as many practitioners as possible. Part of that debate has been the role of regulation, as mentioned by Senator Alex White. I would be supportive of the need for regulation and the protection of consumer interests.

In establishing and encouraging new businesses we must strike a balance between the extent to which people with innovative and entrepreneurial ability should go towards making sure their businesses take hold and the extent to which they should be seen to be agents of the State. Many people establishing new companies are frustrated that the balance in that regard does not weigh in their favour. There is a great deal of paperwork and regulations to which people must adhere before setting up a business and, as legislators, we must ensure the balance is weighted as far as possible in favour of those trying to establish businesses. Some improvements have been made in that area. For example, the VAT registration threshold has been raised a number of times in recent years.

One amendment to a Finance Bill I managed to achieve in my five years as an Opposition spokesperson was when Charlie McCreevy was Minister for Finance, and that was to get rid of a lower threshold for research and development. I made the argument that if we were to get future economic success from research and development we were as likely to get it from single or two person operations operating out of a garage as from somebody working in the highest tech laboratory possible. I listened with interest to what the Minister said in this regard.

The European Commissioner with responsibility for science and research spoke recently to the forum on Europe. One of the arguments I made to him was the need for a proper balance in terms of allowing research to take place for research sake, for a scientist to operate in a situation where he or she is not wholly concerned with commercial matters because much research and development is sponsored by commercial interests. By the same token we have to ensure that research and development money which is provided by the State does not all go through our educational institutions. It is here that we are possibly getting the balance wrong. Money is being absorbed into our third level education system that might be better directed in research and development terms at people establishing small businesses to help them with innovation and marketing needs. It is a balancing act in terms of regulation and State intervention.

I get a sense of cross party acceptance that the need is to ensure the balance should be weighted in a particular direction. If that can be achieved the uncertainty that exists at a global level in terms of the world economy can be overcome. I am confident the measures in place will help us do that.