Eugene Regan (Fine Gael)

In the interests of procedures of the House, the Minister of State should not be worried about the time I have been allocated, or will take, to relay the few comments I wish to make on this issue.

The basis of the Minister of State's statement was that the way to deal with unemployment was through lifelong learning, our education system, etc. There is no basis for that statement because when one considers the cutbacks on the education front in the budget, we are going backwards in terms of providing the investment in human capital which laid the basis for resolving the chronic unemployment we faced in the 1980s.

In regard to promoting enterprise, it is a self-evident proposition that investment in research and development is essential for any developing economy. It should be no surprise that we continue the process of investing in research and development. There is nothing new there.

The 12.5% corporation tax, which is so important for attracting foreign direct investment and which was introduced by the John Bruton-Deputy Ruairí Quinn led Government, was criticised at the time by the Opposition, including Deputy Bertie Ahern and Charlie McCreevy, as a negative. However, it was subsequently adopted and agreed with the European Commission. That low corporate tax regime has been fundamental to attracting inward investment.

In regard to every other aspect, we seem intent on undermining the competitiveness of this economy which is fundamental to continuing the process of attracting further investment. By the Government's own admission, this budget will add 1.1% to inflation. The cutbacks for local authorities will create a situation where various stealth taxes will be necessary in the coming years to sustain the public finances.

I refer to the conditions necessary to prevent a growing unemployment rate. All the forecasts indicate the unemployment rate will increase significantly in the coming years. What we now have is similar to the chronic situation in the 1980s where we are borrowing for current spending. Despite the cutbacks in the budget, there will be an increase in borrowing in 2009. We have a doubling of the national debt, which affects the entire credit rating of the country, and we have a budget, which is deflationary and contributes to reduced growth. Therefore, I do not see the basis for the Minister of State's statement. It is very selective and sets out no propositions that suggest the Government is adopting measures that will do anything to reduce unemployment or moderate the rate of increase in it. It is back to the bad old days of Charlie Haughey and spendthrift Governments where the public finances are out of control. That is the biggest obstacle to creating the conditions for a competitive economy and reduced unemployment.