Michael Noonan (Limerick City, Fine Gael)

The Senator asked other questions about the effectiveness of the jobs initiative. Anybody who got even a week's holidays this summer will be aware that it had a big impact on the hospitality industry. There were more people in coffee shops, bars and restaurants this summer. People were going out again and they were spending. It was a confidence builder but it also reduced the prices. We began to get the tourism industry moving again. It declined about 30% since 2007. We do not have final figures yet but it appears there was a return of at least 10% or 12%, if not more, varying from region to region. It was very successful.

As to whether the VAT reductions are being passed on, by and large in the food business, the hospitality business and the hotel bedroom business it appears it is being passed on but we are not going to put 1,000 inspectors on the road to check who is and is not passing on the reduction. Some people did not pass it on but they stayed in business because it gave them the extra margin. They would have been closing down with a loss of jobs. That is a valid way of doing business as well. Things are so strained in the hospitality and tourism industries I do not believe anyone is profiting out of it. The vast bulk of people passed it on in full. Some people partially passed it on. Others employed extra people and did not pass it on. Others stayed afloat. There is no exact science in this but overall it seems to be working.

We had other initiatives about shovel ready projects in schools, insulation of houses and so on. The only objective evidence we have is the round of unemployment figures published yesterday which I believe indicated a reduction of 33,000 in the live register, the biggest reduction since figures were first calculated.

All we can say about unemployment is that it is too high at 14% but it is stabilising, and the jobs initiative was a contributor to that but it is an inexact science. I will put it this way to the Senator. If we keep doing the same things we always did we will never get out of this crisis. We will have no chance, and therefore we have to try new initiatives. It was a brave initiative to cut the VAT rate from 13.5% to 9%, and it had to be paid for, but it was worth doing rather than saying we will do what we always did, pray and hope it will go away. It will not go away. We must think outside the box in this crisis. We have to do different things in different ways. A compliment paid to me when the jobs initiative was announced was from one of the Senator's former fellow Senators who stated: "Why did we not do all those things when we were in government?" We must think differently, and we will do other things as well.