Michael Mullins (Fine Gael)

I welcome the Minister of State, Deputy Creighton, and congratulate her on her appointment. As Senator Byrne stated, she is doing an outstanding job. Hers was an inspired appointment. I have no doubt that she will continue to represent us with great distinction on the European scene.

It is apt that we are engaging in this debate against the backdrop of the economic and financial crisis that has brought our country to its knees. There are 450,000 unemployed, our brightest and best emigrating, many people losing their homes, the public service is under pressure and large numbers of small businesses are struggling to survive. While most of our economic ills can be attributed to the disastrous economic policies pursued during the past decade, our recovery will be dependent on many decisions taken and measures implemented at European level.

I welcome the decision taken by European leaders at the end of March to put in place a comprehensive package of measures designed to strengthen economic governance, safeguard the stability of our common currency, the euro, and improve Europe's competitiveness. I understand that EU Heads of State or Government will meet again later this week at the European Council in order to address the economic challenges we all face.

In its first 100 days in office and since it took on the daunting task of turning our economy around, the Government has taken many significant decisions. These decisions have been supported by our European and international partners and they include the restructuring of our domestic banking system. Under this restructuring, two new pillar banks will be created and the banking sector will be smaller and will focus more on the needs of the Irish economy and Irish society in general. Funds must now flow to small businesses. Many Senators referred in recent days to small businesses being choked as a result of a lack of funds being made available by the banking sector.

Other significant decisions taken by the Government include the launching of the jobs initiative, which included a restoration of the minimum wage to its previous level, and the announcement of a comprehensive spending review that will engage in a forensic examination of spending across all aspects of Government. We all accept the need to secure value for money from the scarce resources available to us. Budget 2012 will make adjustments which will without doubt impose further pain and sacrifices on all sections of society. I hope these steps will not be in vain and we will soon begin to see the start of economic recovery.

Many Senators will agree that three key issues must be addressed if we are serious about economic recovery. The Minister of State spoke extensively about the issue of competitiveness, investment in innovation and research and development and the development of the small and medium enterprise sector. I welcome the endorsement by the European Union Competitiveness Council of a new, integrated European industrial policy which places competitiveness and sustainability centre stage. Sadly, we are all too aware of the large number of jobs this country has lost to lower cost economies over the past decade as a result of our lack of competitiveness. Ballinasloe has lost more than 1,000 industrial jobs, including at the plant in which I worked for 25 years, because we are no longer competitive.

As the Minister of State noted, we must strive to become a leader in innovation and invest accordingly. Such investment is key to gaining competitive advantage and increasing productivity. The many success stories of companies which invested heavily in innovation and research and development have continued to thrive despite the economic downturn. This makes the argument for investment in these areas. I join others in complimenting Commissioner Geoghegan-Quinn, who also hails from Galway, on the role she is playing. I have no doubt she will be a friend to Ireland in disbursing funds.

I am pleased the Government recognises the importance of the small and medium enterprise sector which employs almost 700,000 in 240,000 businesses. While Governments cannot create jobs, they can create an environment which facilitates job creation and retention. As the Taoiseach noted on the introduction of the jobs initiative, these measures are but a small start and a move in the right direction. I have had some positive feedback about the initiative from employers in small businesses in the west. The recently announced measures will have a significant impact and are already having a small impact.

The review of the sectoral wage agreements in the coming weeks will have a further impact on job creation and, I hope, enable small businesses to recruit an additional one or two employees, which would make a significant difference in reducing the awful figure of 450,000 people on the live register.

The Government's decision to appoint a Minister of State with responsibility for small business shows its commitment to this important segment of the economy. The Minister of State, Deputy John Perry, who was present for the debate on employment issues this morning, is taking his role seriously. Access to finance is an important issue for small and medium enterprises. I urge the Minister of State to continue to work on the construction of a single market in Europe for venture capital and broaden access to other European financial instruments such as guarantee schemes. The Government acknowledges that our European partners are crucial to enabling Ireland to overcome its economic difficulty. However, they must also divert their gaze from our corporate tax rate of 12.5%. We must ensure we maintain this tax rate as it is critical to the economic recovery.

The modest growth beginning to emerge in the economy is primarily being driven by exports and the international sector. It is in the interests of Ireland and the European Union that these prospects for growth are not damaged by uncertainty about our corporation tax regime. This is particularly important to a small, open economy on the periphery of Europe. As the Minister of State noted, the message the House wishes to send out today is that Ireland is open for business. We are meeting our targets and have, I hope, drawn a line under our banking problems. The fundamentals of the economy are strong. We will see a record balance of payments surplus this year and the country is beginning to return to modest growth, having recorded the second highest trade surplus in the European Union, after Germany, last year. It is also in the top 20 nations for quality of scientific research. These are all positive indicators and if we continue to work closely with our friends in Europe, the economy will achieve modest growth in 2012-13 and, I hope, significant recovery during the lifetime of the Government.