Larry Butler (Fianna Fail)

I am here to speak a little about the economy and what we can do to stimulate it, which is the most important matter. We have seen the downturn. The first thing that affected the economy was a downturn in housing construction, which was a major employer. Now we see there is a significant downturn in that sector of approximately 40%. This reflects 4% of gross domestic product. That, in itself, without global problems, would have caused major problems to any economy, not to speak of our small, open economy. This has affected other sectors of the economy, small businesses in particular. Most small businesses and allied trades relating to the construction industry account for approximately 170,000 workers. This a substantial employment sector.

Now that there has been a reduction in interest rates, it is important these are reflected in the economy. I agree with Senator Hanafin that it takes time for such actions to manifest themselves in the economy, but it is important the banks realise that small businesses need this interest rate cut of 0.75% passed on to them. I am reliably informed that there are still some institutions in the banking sector which have not passed on some of the previous reductions amounting to 1%. Given that we supported the banks and ensured none of them went out of business, which was important for this small economy, we have an obligation to the public to ensure this mortgage interest rate reduction is passed on.

I want to speak briefly about how we will stimulate the economy. Stimulation of an economy must be productive. One cannot stimulate economies without ensuring that there is a payback and saving to the economy. That is vital.

Every house in Ireland must meet an energy rating on 1 January next. There are one million houses that do not meet the energy rating. Considering we could create anything from 25,000 to 30,000 jobs in this sector, it is a growth area in the economy which will save us considerable money in the long term. This is the sector we should examine. It would reflate the economy. That retrofitting sector is worth €9 billion. That would be a €9 billion investment in the economy in terms of goods and services, 80% of which would be manufactured or supplied in this country. Not only would it save jobs, it would create them as well. The sector which will test the housing will create in the region of 1,300 jobs. Imagine announcing 1,300 jobs from a company coming in from abroad. We would say it was marvellous. This is something we can do for a small investment. The investment would have to be in the region of €250 million. We could introduce tax breaks for people who invest in their homes, which is another option. That should continue over the next three years. That certainly would give a significant boost and improve spending power.

It is important to pick up on a few points made by other speakers. The Government has been very responsible in how it has approached this. First, we took action in terms of the banks. We had a vast liquidity problem and our banks could have gone out of business. I pay tribute to Fine Gael, but I take issue with the Labour Party which now speaks of recapitalisation of banks but could not see its way to support an important measure we took in this House.