Martin Mansergh (Tipperary South, Fianna Fail)

It is. I hope it will be circulated shortly. I apologise, but Members will appreciate that the plan was only launched two hours ago. It specifies the reforms the Government will implement to accelerate growth in the key sectors.

The four year plan has been in preparation for some time and has taken on considerably greater significance in view of the application to our European partners for assistance. It sets out the Government's three-strand approach to resolving our current difficulties: restoring order to the public finances; restructuring the banking sector; and structural reforms affecting both the public and private sectors to encourage renewed growth.

Since the downturn started in 2008 we have made fiscal adjustments through taxation and expenditure of €14.6 billion. These succeeded in stabilising the underlying budget deficit this year below 12% of GDP; if no action had been taken, the deficit would have reached 20% of GDP, which excludes the impact of the promissory notes on the 2010 general Government deficit. This stabilisation in the public finances has been accompanied by an improving economy which is emerging from recession. GDP will record a very small increase this year based on strong export growth. Exports are expected to grow by approximately 6% in real terms this year, driven by improvements in competitiveness and a strengthening of international markets. Conditions in the labour market are also beginning to stabilise. However, domestic demand remains weak as households and businesses continue to save and pay down debt.

Despite these positives, we still have a considerable amount of ground to make up. There is a gap between what we receive as a country in tax receipts and what we spend. The gap is currently €18.5 billion which is unsustainable and currently filled by borrowing. If we do not reduce the rate of borrowing, debt service costs will absorb a rapidly increasing proportion of tax revenue. Moving towards a balanced budget is a prerequisite for future economic growth. The plan will achieve the target of reducing the general Government deficit to less than 3% of GDP by 2014 through a combination of expenditure reductions, tax increases, a renewed focus on growth and competitiveness, structural reform and public service transformation.

As Members are aware, the fiscal adjustment will amount to €15 billion over the four years. The Government will make the biggest adjustment, €6 billion, next year. This will encourage confidence at home and abroad in the Government's commitment to make the necessary adjustment. The plan provides clarity and certainty about what will be done and will help in restoring consumer confidence which will be important for our overall recovery.

We are all aware that the economy went though a period of unprecedented growth from the mid-1990s through to 2007. The benefits of this growth were felt across every section of the population, with increases in social welfare payment rates, higher public sector pay and falling taxes. However, in our current circumstances these expenditure and taxation measures have proved to be unsustainable. We, therefore, need to restore balance.

Although we are making a significant budgetary adjustment, the economic outlook is favourable. The conditions for resumed export-led growth are in place. Our transport infrastructure has been transformed; our workforce, as we often point out, is one of the best educated in the world; and our tax system supports enterprise and innovation. The macroeconomic outlook for the plan is positive. Real GDP will grow by an average of 2.75% from 2010 to 2014, with lower growth in the earlier years and increasing thereafter. Unemployment will fall from 13.5% in 2010 to 10% in 2014. The balance of payments is expected to return to surplus in 2011 and will increase steadily in the following three years. This means that the economy is no longer borrowing from the rest of the world. This positive view of prospects is reflected by other commentators; the recent OECD Economic Outlook also contains a favourable economic outlook for Ireland.

The critical aspect of the plan is the fiscal adjustment. The budgetary adjustment will be €15 billion over four years, with the biggest adjustment of €6 billion to be made in 2011. Two thirds of this adjustment will be achieved through expenditure savings, while one third, €5 billion, will come from revenue raising measures. These measures will bring the general Government deficit below 10% of GDP in 2011 and 3% by 2014. The debt to GDP ratio is expected to peak at 105% of GDP by 2013 and improve thereafter, falling to 101% by 2014.

Of the overall expenditure reduction of €10 billion, current expenditure will contribute €7 billion, while capital expenditure will provide €3 billion. An expenditure reduction of this magnitude requires a focus on the major areas of expenditure - public service pay and pensions, social welfare, public services, including student supports, publicly provided medical care and treatment, and public investment.

One third of the total adjustment - €5 billion - will come from taxation measures. Some 40% of these measures will be introduced in 2011, with substantial reform of the income tax system. Of course, one element of our tax system that will not change is corporation tax. The Government's commitment to the 12.5% rate means it will not change. The Government's commitment includes that of the two main Opposition parties. The changes to income tax will include base broadening measures to bring more taxpayers into the net, while a range of tax exemptions and reliefs will be abolished or curtailed. These changes will return income tax revenue to 2006 levels. A new local services contribution will also be introduced. There will be changes to indirect taxes, capital taxes and other charges, and tax expenditures. The details of these changes are contained in the plan and Members will, no doubt, become familiar with them.

The plan, however, includes measures aimed at supporting growth and to achieve public service transformation. In the case of the private sector, our approach is to support it by removing potential impediments to competitiveness and employment and by adopting sectoral policies to encourage export growth and a recovery of domestic demand. I will focus on some of the more fundamental reforms contained in the plan. These may receive less attention but they are critical to our longer term prospects.

Getting people back to work is a central plank of the recovery plan. We need to create the conditions for job creation and retention in a real and meaningful way. At a minimum, this requires flexibility and agility of the workforce and a move away from the rigidities that have characterised the labour market in recent years. The cost of labour has impacted on our competitiveness in the provision of domestic services and that of exporting firms. The challenge now is regain the lost competitiveness achieved in the 1990s and early 2000s and set the labour market on a firm footing for recovery. The movement back to an agile and competitive labour market is difficult but essential and decisive action is required. This will be achieved through a combination of measures - reform of the minimum wage and activation of the unemployed.

The level of the minimum wage has remained unchanged while GNP has fallen in value terms by 19% since 2007. This has been accompanied by reductions in rates of pay across the economy. The national minimum wage is the second highest in the European Union in absolute terms and the OECD has recommended a reduction to remove a barrier to job creation for younger and less skilled workers. The reduction of €1 to €7.65 will still leave it above the UK rate.

It is absolutely critical to our economy recovery that unemployed people are equipped with relevant skills and kept closer to the labour market in order that when jobs become available, they can move quickly into the workforce as our economy recovery takes hold. For that reason, we are providing for a further focus on the provision of structured pathways to employment for unemployed people.

We will promote rigorous competition in the professions. There will be measures to reduce waste and energy costs to business. The availability of technology infrastructure will be enhanced, with an emphasis on next generation broadband. There will be renewed action to reduce rents for both the private and public sectors. In addition, there will be an emphasis on increasing the efficiency of public administration to reduce costs for the private sector.

The plan sets out sector specific policies to increase exports and improve domestic demand. There will be a continued emphasis on innovation through the innovation fund and the enterprise supports in the tax system. This will include implementation of a number of the goals set by the innovation task force. These reforms and other measures will lead to a more stable macroeconomic environment.

The plan outlines a considerable number of reforms for the public sector to enable it to operate more flexibly, efficiently and effectively with a substantially reduced number of staff and financial resources. The resulting reduced costs and improved service will support the measures to boost growth in the private sector.

As I have just come from launching a tourism guide, I wish to mention some of the measures that relate to tourism. Obviously, it is just one sector but an important one. The revaluation exercise which has reduced the rates bill for hotels, guesthouses and so forth in the Dublin area will be accelerated across the country. What I have said on the subject of the minimum wage will have particular implications for the hospitality sector. It is not just of benefit to employers in the industry, it is equally of benefit to those seeking employment in the industry, in which employment has tended to dry up. While there will be some limited economies, expenditure on tourism promotion in key markets and on tourism product, in some of which the Office of Public Works has an interest, will be broadly maintained.

As Members are aware, we are in discussions with the European Union and the IMF on a programme to provide fiscal support for Ireland in the coming years. The plan sets out a considerable range of measures to achieve the objectives of that programme. They are measures that can be justified in their own right. The plan will restore order to the public finances. It will also stimulate broadly based export-led growth, bringing sustainable employment creation which will support the recovery of the domestic economy.

It is evident that we have taken some very difficult but necessary decisions. Deferring action will only increase the difficulty of the adjustment. All of these steps are being taken to secure the future for the country in order that we can stabilise the economy, return to sustainable levels of growth and, in turn, reduce the level of unemployment. That is the key objective of the Government. A total of 90,000 net new jobs are expected to be created in the period 2012-14, while unemployment will fall below 10% by 2014. The economy is recovering, but we still have a long way to go, particularly for the public finances. The plan provides a platform on which to build a better and more sustainable future.

The plan runs to 140 pages and contains a great deal of detail. Obviously, if I were to delve into the details at length, I could easily speak for an hour or so which I do not wish to do. I want to allow others to contribute. All I have been able to give is a brief outline of the thrust of the document. There is a great deal to be chewed over sectorially. We must also bear in mind it is still a fortnight to the budget when the specific decisions not contained in this document will be announced. I look forward to hearing what can probably be only preliminary reactions from the House.