Hildegarde Naughton (Fine Gael) | Oireachtas source

I welcome the Minister, Deputy Bruton, to the House. The Opposition of every hue has been calling for spending increases on every conceivable project since this Government entered office. I suppose that is the wont of opposition. Unfortunately, the previous Government never had difficulty with answering these calls with large sums of money obtained from an unsustainable over-reliance on taxation from the property sector. It was an easy but self-defeating way to govern, as we now know to our cost. There is no doubt, however, that increases in spending in various sectors are warranted and, as the economy continues to improve, further appropriate increases will occur. That process was started in the most recent budget.

The only way to have sustainable public services is to have them underpinned by taxation arising from high rates of employment in sectors that are strong and growing. The previous Government cost this State 320,000 jobs, which were lost before actions were taken by this Government to arrest that landslide. Thanks to the previous mishandling of the economy, Irish unemployment almost trebled, peaking at 15.1% in mid 2012. Since then, the Government, through the Action Plan for Jobs, has been unrelenting in focusing on getting our country back to work. Two and a half years later the success can be seen, with today's figures indicating our unemployment rate is at 10.7%, with the prediction that it will continue to fall.

I will quote from the OECD report on Ireland's Action Plan for Jobs, APJ. It indicates "The APJ's most striking innovation in the Irish public policy context is a co-ordination mechanism that ensures high-level political buy-in and oversight, whole-of-government engagement and the establishment of quarterly targets underpinned by a robust monitoring system." As Senators will gather, this is both praise for the job undertaken and an implied criticism of previous public policy. We have a terrible record of such policy initiatives being announced with fanfare and being left wither on the vine. For the first time in any area, the Action Plan for Jobs was underpinned by total cross-government co­ordination, targets and timeframes. There was complete political buy-in. The plans and follow-up steps were published, and the Government is completely open in publishing the targets met and those which have not been met. The Minister is held responsible when targets are not achieved and praised when they are. To date, I am glad to say, an overwhelming majority of the input has been praise. This is an experience that can be transferred to other areas of policy.

I will refer to another OECD comment. Unlike other areas of recession in Europe, Ireland alone has changed its employment mix, ensuring that highly skilled workers gained employment. That reflects our warranted change from traditional, low-tech industry to creating employment opportunities that cater for our increasingly well-qualified people. The OECD also confirms that we are well on track to deliver the 100,000 jobs promised by 2016. It also notes that the target of 2.1 million people in employment by 2020 is firmly within our grasp. Although we can never create enough jobs quickly enough, the story so far is one of positive progression and that is to be welcomed. I fully support the continuation of the current policy.

There are two linked issues I wish to highlight, namely, the small and medium enterprise, SME, sector and the question of "red tape". There are approximately 300,000 SMEs in Ireland and they are, as the Minister will acknowledge, the lifeblood of our economy. That is particularly true in terms of creating employment. It is also the case that these businesses have a disproportionate reliance on the banking sector for their external funding requirements. The banking crisis had a crippling effect on this sector but I note from recent statistics that the banks are again lending in this area. AIB this week indicated it had increased lending to SME's by 60%, which should be welcomed. However, the potential game-changer for SMEs and their capability to create employment is the advent of the Government's Strategic Banking Corporation of Ireland legislation. The fiscal discipline shown by Government to date enabled the creation of this fund to support our indigenous industry.

There are valuable initiatives such as the National Pensions Reserve Fund delivering €850 million of funds in a range of supports for the SME sector, the pillar bank lending targets being increased to €4 billion each, a seed and venture capital scheme run by Enterprise Ireland worth up to €700 million, the development capital scheme worth €225 million to support growing mid-sized indigenous companies and the Credit Review Office recruiting additional staff to support monitoring work. In his preparations for next year's budget, I urge the Minister to stress to the Minister for Finance what is still a high cost of doing business in this country. Employers' PRSI, for example, is still far too high, and the Minister should try to ameliorate that burden in the next budget.

With regard to red tape, I note the Minister has, among other measures, increased the number of businesses exempt from the requirement to hire external auditors to the maximum level permitted under EU law. In that regard, I urge the Minister to continue to review the constriction on SMEs in this area. Regulation should be suitably strict but not so severe as to stifle job creation. According to the recent World Bank Doing Business report, Ireland is ranked 13th in the world and second in Europe in terms of the ease of doing business but that survey was conducted with the heads of multinationals and not our own indigenous business owners, who would have a different view. The World Bank report is welcome but we cannot rest on our laurels and I again urge the Minister to review the area.

In conclusion, this plan has been shown to work, with 80,000 net jobs created. This shows that in public policy terms, a positive plan, properly resourced with exacting standards which are properly monitored, can work. I congratulate the Minister on his achievements to date.