Paschal Mooney (Fianna Fail)

I welcome the Minister of State. I wish to put the recovery plan in context. The report states:

From the late 1990s, the benefits of our booming economy were felt across every section of the population. Working-age social welfare rates are now more than twice their rate in 2000. [They increased by 300% between 2000 and 2009 at a time when the rate of inflation was 16%.] Public service pay also increased well ahead of inflation. From 2000 to 2009 average public service salaries increased by 59%. At the same time, taxation was reduced. During the period after 2000, the entry point to income tax increased from €7,238 to €18,300 for PAYE earners and since 2000, bands have widened by 105% for the single person and married two earners.

The statistics contained in the recovery plan put the matter in context. The downside is the effect of the property boom which swelled VAT and other receipts. The report states:

In 2007, capital taxes and stamp duty yielded €6.7 billion. This year, that figure is expected to fall to as low as €1.6 billion. In these dramatically changed circumstances, it is clear the State can no longer afford the current levels of social provision and personal taxation.

It seems there has been historical revisionism in recent weeks. If I have a criticism, it is that the extension of the tax schemes for the construction industry, specifically private housing rather than corporate construction, from 2004 onwards should have been stopped earlier. Such was the pressure exerted by all sectors of society, not least by the construction industry which was creating an enormous number of jobs, the Government did not respond adequately. As I pointed out on the Order of Business, despite the wonderful hindsight shown by critics of the Government, none of these issues was under discussion in the 2007 general election campaign. There was no reference to a flawed banking system, an impending banking crisis or the implosion of Government receipts. The Fine Gael and Labour Party manifestoes called for increased expenditure, while the Fianna Fáil manifesto called for restraint. That is a fact of life many in the toxic atmosphere outside that is so anti-Fianna Fáil and anti-Government have chosen not to remember. Perhaps they are ignorant enough not to look at the facts.

The report states capital spending must be reduced, but the reduction must be considered in the context of the substantial investment made in the past decade which has transformed the road network, the public transport system, education institutions and cultural, sports and tourism facilities. These are real gains for the country and represent a legacy for future generations. They were not magicked out of the air but were made because the Government prudently spent the money accruing in ever increasing amounts in the period 2000 to 2010. Such is the scale of historical revisionism, the gains made by successive Fianna Fáil Administrations have been forgotten. They are permanent and show a benefit in terms of the economic impact on the country. As a result, there are lower transport costs and easier access. The country is still an attractive location for foreign direct investment, despite the gainsayers.

I have never taken the approach that the glass is half empty. I accept that the making of a political charge and counter charge is in the nature of politics. However, we must provide hope for and give confidence to the people. I applaud the Taoiseach for the manner in which he opened proceedings today, followed by the Minister for Finance and the leader of the Green Party, Deputy Gormley. The message was one of hope and confidence rather than we had a beaten Government. That was not the rhetoric of a Government in its last weeks. It provided a beacon of hope for the people, that this is a national recovery plan. Society as a whole can combine to bring the country to a better environment.

It is estimated that 45% of taxpayers will pay no income tax in 2010. This is an extraordinary figure when one considers that in the United States of America everyone pays tax. This issue will be specifically addressed in the budget. The economy enjoyed sustained, balanced and export-led growth as recently as the 1990s. The point made in the report is that we can get back to that point. Between 1993 and 2000 exports expanded by almost 18% per annum, driving an average annual GDP growth rate of 9%, a cumulative increase of 500,000 people in employment, a cumulative rise in living standards of about 80%, all in the context of maintaining a healthy balance of payments position and achieving a substantial Government budget surplus. I give credit to the rainbow coalition which was in government between 1994 and 1997. What happened subsequently was in a different context. The reason it is included in the report is that the formula for achieving balanced, sustainable growth appropriate to a small, open economy is not elusive. We discovered and applied the formula for export-led growth in the 1990s and can do so again. It has been shown in the figures compiled in the past 12 months. Exports are improving on an ongoing basis and we will have a balance of payments surplus next year. We will export more than we will import, which is unique among the countries under attack in the eurozone, including Portugal, Spain and Italy.

The report reflects the fact that a number of sectors will experience growth. Exports in the agrifood industry amounted to approximately €7 billion in 2009, representing half of all exports by indigenously-owned firms. During the first five months of this year the value of exports was more than 8% higher than one year earlier, at almost €3 billion. The rate of recovery has accelerated as the year has progressed. Exports grew by 14% in the third quarter. The prospects for the major agrifood product categories in 2010 are generally positive, as better market prices and a more stable economic picture across Ireland's key markets underpin trade. Was it not a joy to see potato farmers loading Irish potatoes onto three ships at Drogheda Port last week? They came from various parts of the country but primarily from the major potato growing areas in County Meath and on the east coast. The surplus of 50,000 potatoes on the Irish market will be sold for export. These are being sold on the Russian market. The people there specifically wanted Irish potatoes because they were free of a particular disease strain endemic elsewhere. This is a wonderful tribute.

The tourism marketing budget of €44 million will maintain Ireland's visibility in overseas markets. This is welcome. Capital funding for the tourism sector will be focused on completing the upgrade of major tourist attractions and developing a number of key iconic attractions. In this regard, I thank the Minister for Community, Equality and Gaeltacht affairs, Deputy Carey, who hosted a tourist initiative in Ballyshannon last Saturday. I pay tribute to Mr. Paul McLoone, general manager of Fáilte Ireland in the north west, with whom I worked in the years I was chairman, for developing three major iconic attractions in the region - Glencar Waterfall in County Leitrim which is known to the followers of Yeats's beautiful poetry; Ben Bulbin of Queen Maeve fame; and Slieve League Cliffs, much more impressive natural cliffs than the famous Cliffs of Moher. I pay tribute to the three local authorities in counties Leitrim, Donegal and Sligo which are putting in money to improve access and infrastructure.

Like others, I raised previously in the House and with the Minister for Finance the question of whether the ten year period for the solidarity bond issued last year was acting as a disincentive, in particular to those who were at or near retirement age and had significant, although not large, sums of money to invest to help the State. They asked me and others if the time limit could be reduced because they considered ten years was a long time. I am pleased to say that in the national recovery plan it is stated that it is intended to launch a new four year solidarity bond shortly with a similar structure to the ten year bond. It will pay a coupon each year and a bonus to those who hold it to maturity. I applaud the initiative taken and thank the Minister for Finance for responding so effectively in that regard.