Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 126: To ask the Minister for Finance the areas of budgetary strategy implemented since 29 September 2008 which were expected to have a positive impact on economic growth; the degree to which this has been measured in the meantime; if it is intended to introduce policy changes in this area; and if he will make a statement on the matter. [18996/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

A number of budgetary measures have been implemented which will support economic growth. It is, however, difficult to quantify the impact of these measures.

For instance, the introduction of the pensions levy in the public sector earlier this year will lower the cost of running the public sector and send a positive demonstration effect in terms of private sector wages.

In addition, the Government is helping to support employment and enterprise by redirecting the NDP, as well as implementing a number of activation initiatives to further encourage individuals into employment. The Government is also implementing measures to support the 'smart economy', through investment and incentives in order to reach an R&D target of 2.5% of GNP by 2013. This will help us re-orient the economy towards the export-led growth which we must achieve.

At a more macro-level, maintaining our public finances on a sustainable path is a pre-requisite for economic growth. In this regard, the various expenditure-reducing and tax-raising measures introduced since October, will have a beneficial impact by restoring confidence as well as improving our competitiveness. As outlined in the recent budget, further measures will be introduced in 2010 and 2011. Notwithstanding these increases in taxation, our tax system remains competitive and pro-enterprise.