Marc MacSharry (Fianna Fail)

I join Senators in welcoming the Minister of State and I welcome the opportunity to make a few points on the Finance Bill.

In the past two years, Members have had many opportunities to speak about the economy as activity, both domestically and globally, has experienced an unprecedented decline. This has resulted in circumstances in which we simply cannot afford to continue to provide the level of service provided heretofore. While this is regrettable and I wish we had more money to provide more and better services, unfortunately, circumstances have changed.

Senator Twomey referred to the manifesto commitments of the Fianna Fáil Party under former Taoiseach, Deputy Bertie Ahern. The expenditures outlined in my party's election manifesto in 2007 were in line with anticipated increases in growth rates and tax revenues of 4% to 5% per annum. When circumstances change, however, it is incumbent on governments and others to change their approach, which is what we have done.

In the past year or two, it has been necessary, through a series of budgets and other adjustments, to change focus and introduce a range of measures, not least those included in the Finance Bill. These have caused pain and created considerable anger and frustration among many individuals and families. Members of the Oireachtas are not exempt from this pain. Senators, Deputies and other State employees will receive pay packets today which are substantially lower than they were last month. This is a regrettable reality to which we must all face up, painful as it is.

I welcome the Finance Bill 2009 as another important and appropriate measure on the bumpy road to economic recovery. The Bill gives effect to the measures announced in the supplementary budget in April. It marks another confident step by the Government to ensure we sort out our economic and fiscal difficulties. Given our small, open economy, it is vital we operate flexibly and in an effective manner. As the nation takes these difficult steps, we will begin to see the first green shoots of economic recovery.

I will rebut some of the comments made by Senator Twomey. Speaking in Dublin at the end of February, ECB President, Jean-Claude Trichet, stated he had full confidence that the Irish Government would take the necessary decisions, would come through current problems and was "acting resolutely to do so". At the beginning of May, the head of the eurozone group of Finance Ministers, Jean-Claude Juncker, stated: "I do think that the Irish Government, with great courage and a deep sense of responsibility, are on the way to taking the right step in a very difficult situation." Ireland, he added, "is behaving in the right way" and "we take our hats off and pay tribute to the Irish people in rising to the challenge and bearing the sacrifices that the Government is asking them to make". It is a matter of public record that our supplementary budget was recently endorsed by Mr. Juncker and Commissioner Joaquín Almunia as the correct approach to our economic and fiscal difficulties.

The market response to the sentiments expressed by Mr. Trichet, Mr. Juncker and others was clear last week when we learned that the National Treasury Management Agency international bond issue was oversubscribed. While these bonds carried a higher interest rate than previous bond issues, nevertheless the oversubscription marked a clear improvement in international sentiment towards Ireland, which was due to the tough decisions being taken by the Government. Although these decisions will inflict a great deal of pain on many families, we were left no with no choice in the matter. We have moved far beyond considering the political implications of such measures and history will record that the appropriate steps were taken at the appropriate time.

As the Minister outlined, the aims of the Finance Bill were to show a credible way forward for dealing with our structural problems while protecting the economy and ensuring the measures introduced are fair and progressive. The Government seeks to look after to the fullest possible extent those who are less well off, while sharing the burden across all sectors. Those who can should pay their way in these difficult and unprecedented times.

While many measures are not popular, it is necessary that we take them. The establishment of the National Asset Management Agency, NAMA, to which Senator Twomey referred, is another necessary measure. The House had an excellent debate on NAMA as did a meeting of the Joint Committee on Finance and the Public Service this week which lasted for four hours and which was attended by both Senator Quinn and me. The meeting clarified plans for the new agency, although I accept some of these plans remain very much a work in progress. Nevertheless, we now have much more information than previously and I am confident the principle behind the decision to establish NAMA is the correct one and the agency will produce dividends over the medium to long term. The Government has taken the correct approach, which I believe will be mimicked throughout the eurozone, if not further afield.

One of the first steps being taken in the Bill is to address the fiscal challenge in the area of taxation. As the Minister indicated, we must broaden our tax base. The taxation measures introduced will raise some €3.8 billion and there will be cutbacks in expenditure of €4.3 billion for 2009.

As the Minister, Deputy Brian Lenihan, pointed out, property related accelerated capital allowance tax relief schemes in the health sector have been terminated and it is estimated this will save up to €60 million in a full year. The rates of interest applied by Revenue on late payments and underpayments of tax by businesses will be reduced by 20% to annualised equivalents of 8% and 10%, approximately. This is a welcome measure for businesses across the country.

We have managed to keep our corporation tax rate of 12.5% in order to continue supporting enterprise in the country. Indeed, there has been an increased level of expenditure by FDI companies operating in Ireland in recent times. In fact, anecdotally, I understand that Mr. Bill Gates is currently holidaying in Mulranny in the west, which is a good vote of confidence in this country, not least from a tourism perspective but also in his particular belief that this country is moving in the right direction.