Willie O'Dea (Limerick City, Fianna Fail)
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Question 36: To ask the Minister for Finance his policy on improving consumer confidence; and if he will make a statement on the matter. [13169/12]

Michael Noonan (Limerick City, Fine Gael)
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The Government considers that the best means to improve consumer confidence is to restore sustainability to the public finances, repair the banking system and return the economy to sustainable growth. Effectively addressing these three areas will result in increased employment, investment and consumer spending and will be key in driving this country forward.

Looking more specifically at what the Government is doing to restore sustainability to the public finances, we have met all our fiscal targets to date and are on track to meet future targets under the Programme of External Financial Assistance. Furthermore, the Deputy will be aware that in the Medium-Term Fiscal Statement, the Government set out the required fiscal adjustment path over the medium term. This will provide Irish citizens with greater certainty regarding the magnitude of future budgetary adjustment measures and, in doing so, will help to improve confidence among households.

In terms of repairing the banking sector, the Irish banking system has been recapitalised to a very high level and has undergone significant restructuring to make it fit for purpose. The Government has imposed lending targets on AIB and Bank of Ireland for the three calendar years, 2011 to 2013. Progress on these lending targets is monitored by the Credit Review Office (CRO) and by my Department. Additionally, the CRO ensures that the pillar banks do not refuse credit to viable businesses, both by its existence and by offering the right to a review of refusals.

With regard to returning the economy to sustainable growth, we have seen significant improvements in our competitiveness. In terms of the labour market, we have targeted our limited firepower in more labour-intensive sectors, with measures contained in the Jobs Initiative and the recent Action Plan on Jobs. Indeed, figures published this morning show the first quarterly increase in employment in four years in the final quarter of last year. While the increase was relatively small, at least we are moving in the right direction.

While consumer confidence is important, I think that it is crucial that we do not ignore investor confidence, a large part of which reflects our international reputation. The Deputy will be aware that the IDA recently announced that a record number of new investments were won last year. Indeed, the FDI pipeline looks positive. We have also taken a number of steps at a more micro-level to support job creation and return confidence to entrepreneurs including the extension of three year corporation tax exemption for new start up companies and enhancing the R&D tax credit. Overall, I think we have seen that Government policies, both domestic and at EU level, are helping to improve confidence among consumers and investors.