Feargal Quinn (Independent)

I welcome the Minister of State. I was saying before the break that I agreed with the overall sentiment of the Bill, which aims to foster employment through enterprise. The world economy is starting to improve, from which I hope we will benefit. There are positive signs. The latest quarterly economic outlook compiled by Bloxham stockbrokers states the economy appears to be moving in the right direction, having picked up in February after a disappointing January. The report also carries warnings against complacency by relying too much on economic recovery in the United States. The basis of the economy and the budget must be exports. We must not rely on producing just for the domestic market.

The Bill is very supportive of foreign direct investment. I hope the changes to the corporation tax regime made in the Bill will make it easier for multinationals to locate their headquarters, research departments and patents in this country. Experts on taxation have indicated that changes to the tax treatment of royalties will be a major boost. The legislation encourages multinationals to leave their patents and copyrights in Ireland by easing the administrative burden and providing tax credits. As has been shown by research, making the tax code simpler to understand and more fair, not just for multinationals but also ordinary people, actually raises more money for the Government. I strongly believe income can be increased in that way. I have opposed percentages all my life. Sometimes one can increase income by reducing the percentages. I have learned this from business but the same principle also applies in governance.

I recall when the former Minister, Mr. Charlie McCreevy, reduced the betting tax rate. He was howled at by some people who said he was looking after his friends in the horse industry. If I recall correctly, he reduced the betting tax from 20% to 10% and told us the following year that he had made more money from the 10% rate than from the 20% rate. He then reduced it to 5% and returned the following year to tell us he had also made more money from it. I am a great believer that one can sometimes make more money by reducing tax rates. We could also make more money by simplifying the tax code. When one makes the tax code simpler, one eliminates loopholes and opportunities for individuals and businesses to cheat the system. This is an area in which there is room for more simplification for the customer.

The Bill contains measures to enhance the research and development tax credit. I hope this will encourage even more multinationals to locate here. New talent will be attracted to conduct research and development in Ireland because of the measures being proposed. While the Government has made no concrete commitment to research spending beyond 2013, the recent report from the innovation task force commits the Government to investing at least 3% of GDP in research and development until 2020. Not to put a damper on such an aspirational document, but is this wise, given that the traded goods and services sector is dominated by multinationals?

There has been massive emphasis on promoting the idea that research and development in our universities will somehow mean we can create the new Google or eBay overnight. Government policy appears to have overlooked the obvious. Innovation policy should be focused on the needs of the customer, as is the case in Cambridge. Mr. David Connell is one of the authors of a very interesting report entitled, Exploding the Myths of UK Innovation Policy. In it he states: "The business of carrying out research and development contracts to solve customer problems and develop new products has been highly tuned by leading Cambridge firms." What happened in that case was that the universities had developed the product and the multinationals had taken it on and created jobs on that basis. We should heed this important report which emphasises that paid research and development to solve customers' problems often leads to ideas for standard, brand name products that can be commercialised through subsidies or separate spin-off companies. It is called a "natural, demand-led innovation process" which leads to high wage rate, export intensive industries - exactly the type of industries that are ideal for Ireland. I said earlier that I was in Brussels yesterday. I spoke to a man from Finland who told me how Finland's exports had dropped dramatically in the past year - the Finns are hoping to revive them - because they were based on basic products and not focused on the needs of customers in terms of research and development. That is a much better way to proceed and we must work hard to do this.

Our indigenous food industry is an example of where research and development are important. Food production is a massive area with potential that is often overlooked. I was a member of the group which set up Bord Bia in 1994. Ireland is renowned for food production. The United Nations Food and Agriculture Organization, FAO, has stated global food production will have to increase by 70% - I was amazed by that figure when I read it - to provide for an additional 2.3 billion people by 2050. In spite of this, I was disappointed when the Minister for Communications, Energy and Natural Resources, Deputy Ryan, said we should not even discuss genetically modified food. The world must produce more food and this is Ireland's strength. We should be able to debate the issue and discuss whether crop productivity can be improved with science. We should debate it, rather than say it is not open for discussion. I accept that Senator Boyle and I do not agree on genetically modified food. I am not sure who is right but I am sure we should debate the issue. We should not ban such a debate.

Our farmers must compete with others who are employing modern methods of production, otherwise we will be left behind. We need to find a way to be able to handle that. Ireland is the 24th largest milk producer in the world and the 17th largest beef producer. On the other hand, New Zealand is the 8th largest milk producer and its co-operative Fonterra is the world's largest dairy company which had a market share of 2.7% of world production two years ago. Glanbia was the 20th largest, with a market share of 0.4%. New Zealand is not as big as Ireland. Why can Irish producers like Dairygold, Kerry and Glanbia not be the biggest in the world? Why is a country like New Zealand much more successful than Ireland? It depends on our investment in research and development.

An area on which I wish to touch, which was mentioned by the Minister, is the potential for the expansion of Irish education. Educational services is another area where there is much room for expansion. We are world renowned in the field but Irish education exports do not even have a separate category when it comes to service exports. What must also be borne in mind is that education is Australia's 3rd biggest export earner, while in New Zealand education accounts for 7% of its export earnings. My contribution today concentrated on exports because, to a large extent, we have to depend on them. According to a new European Commission study of third level education international recruiters believe that Ireland produces the most highly-employable graduates in the world, which is a great compliment to us. Universities in other countries have rated Ireland's universities as excellent. Another report from the European Commission stated that, considering their size, Finland, Ireland and Sweden are the countries with more universities pointed out by peers as being excellent. In analysing the efficiency of the various third-level systems worldwide, it found that Ireland, Japan, Sweden, Britain and the Netherlands were top of most efficiency lists. We have major opportunities to do things in that area.

The University of Phoenix, North America's largest private education provider, has increased enrolments from 384,000 to 455,000 in one year, which has been done without an increase in physical buildings. I am an adjunct professor of marketing in NUIG - I asked what "adjunct" meant and was told it means I do not get paid. I gave a lecture to five classes last year. One was in France, one was in Russia, one was in Virginia, one was in another part of the United States and one was in Galway. They were able to question me. It was very interesting to see what one can do with modern technology. The University of Phoenix has increased its enrolments by a dramatic amount which has been done without any increase in physical buildings. It was able to use electronic means of communicating and lecturing. In Ireland, Hibernia College is pioneering on-line education and exporting its knowledge to foreign universities.

As I have mentioned before in Doha, the capital of Qatar, there are branch campuses of a number of universities from the United States, including Cornell, Georgetown, Texas A&M and others. The University of Sorbonne in Paris has set up a campus in Abu Dhabi. The Royal College of Surgeons, long open to foreign students, has set up branches in Malaysia, Bahrain and Dubai, but there is much more that other Irish institutions like UCD, Trinity College or renowned second level or third level schools could do.

We could promote Irish exports through new European Union embassies. This country relies massively on exports. I have always argued that St. Patrick's Day is a brand which we should continue to use effectively around the world. We need to better promote our products, such as food, abroad. The formation of the European Union diplomatic service, the European External Action Service, and the new embassies that will be established could provide a really significant medium to promote Irish exports. There are a lot of Irish companies which want to expand but face some difficulties in doing so. How can we help such companies on the ground in the international arena? The External Action Service is meant to focus on diplomatic issues, but there is great scope for the service to get involved in business issues. In particular, small and medium Irish enterprises need help on such issues.

For instance, what does an Irish company which wants to expand in a country where there is no Irish embassy do? The European Union will have more embassies than any other country in the world, including the United States, so a massive opportunity is provided by the European Union embassies for Irish companies to expand into unexplored markets. I urge the Government to promote the idea of using the new European Union embassies to provide assistance to Irish companies which need some initial help to expand internationally.

I have touched on five different areas which are all related to the Finance Bill and what we should be doing. I said I support the Bill. We need to do a strong job in order to ensure we identify and maintain our reliance on exports and make sure we do not run into the same problems which could happen if we do not keep a determined, objective view on how we can manage to balance our economy.