Paul Bradford (Fine Gael)

I find the comments of Senator Walsh interesting. Over the past five or six years he has made many predictions. We thought those predictions dire and overly pessimistic at the time, but sadly they came to pass. He has maintained a consistent line with regard to the need to reform the economy and the public service and to keep costs down. I take on board what he has said. However, with regard to his comments on the construction industry and his efforts to provide some degree of assistance, it must be acknowledged that as part of the broader jobs initiative, money has been set aside for energy and insulation grants. That will be beneficial for the construction industry, even if it is on a small scale basis. The Minister for Education and Skills has also introduced an initiative to provide significant assistance to the schools building programme. That will also create jobs.

I welcome section 3 as a whole. It is not often that the Minister of State or his colleagues come into this House and do what we ask them to do. There has been a strong demand across the sector to reduce VAT on these services and the tourism industry in general. This Bill will do that. We would love if it could go further, but we have to appreciate the very difficult economic times we are in and the fact that the Government's choices are limited.

It is interesting that the reduction in the section will only apply for a set period. It is a bit like the air travel tax. Representatives of sectoral interests have told us that if we do certain things, they will create a certain number of jobs. As a result of this reduction for a limited time, we will be in a position to put the challenge to people in this sector and await their response. I hope it will be positive and effective.

The history of taxation in this economy going back to the 1980s has been that when we have provided incentives, they have resulted in economic activity and job creation. There was an excess in respect of property tax reliefs, but a simple rule of economics is that when income taxes are reduced, particularly income tax and VAT rates, additional economic activity is generated.

I look forward to the introduction of this section. It will be beneficial. Under the constrained circumstances in which the Government finds itself, it is as far as we can expect to go at this stage.