Michael McGrath (Cork South Central, Fianna Fail)
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214. To ask the Minister for Finance his views on recent OECD comments on Ireland’s public finances and that further reforms were needed to increase competition, innovation and make it easier to start and develop a business; and if he will make a statement on the matter. [46174/14]

Michael Noonan (Limerick City, Fine Gael)
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I note the opinion of the OECD that the revenue gains from higher economic growth should be used to accelerate the reduction of the debt ratio. However, it is important to point out that, when framing a Budget, the Government does not just consider the fiscal position but also has to consider a number of other issues such as social cohesion and the need to safeguard the ongoing economic recovery. 

It should be borne in mind that these benefits will be achieved while still meeting our budgetary targets under the Excessive Deficit Procedure (EDP).  In fact, we are targeting a deficit of 2.7 per cent of GDP in 2015, inside the 2.9 per cent target. Indeed, I note that the OECD in its analysis of Ireland in the recently-published Economic Outlook is of the view that this EDP objective will be achieved in 2015, as a budget deficit of 2.9 per cent of GDP is projected.

As regards the need for further reforms, I have long said that the burden of the income tax system in Ireland is too high and acts as a disincentive for work and investment.  The income tax measures announced in the Budget will reduce the burden on working people while also securing the economic recovery that is under way. As I outlined on Budget day, my Department estimates a three year reform plan along these lines could boost employment by as much as 15,000 jobs when the full impact of the changes has taken effect in the economy. This will underpin the job creation already underway in the economy as evidenced by CSO data released last week which show that more than 80,000 people are at work in Ireland compared with the low point of mid-2012. 

This Government recognises the role that structural reforms can play in increasing the capacity of the economy to grow. To this end, the Action Plan for Jobs 2014 contains several actions designed to increase competition and innovation and to support new business formation.

For example, as regards the ease of starting and developing a business, entrepreneurship is one of the "disruptive reforms" included in the Action Plan for 2014.  In support of this, I announced a number of measures to support the SME sector in the Budget. These included an increase in the amount of finance that can be raised by a company under the Employment and Investment Incentive to €5 million annually subject to a lifetime maximum of €15 million. I also announced changes to the Foreign Earnings Deduction to support SMEs to grow their businesses abroad.  A range of other measures to support entrepreneurs including the roll-out of the Local Employment Offices (LEOs) are outlined in the Action Plan.

The Action Plan also includes a range of actions in the area of innovation, focused on accelerating the economic and societal return on our STI investment, further strengthening enterprise engagement with public research and driving more commercialisation of publicly performed research.

For all the actions planned for 2014 in these areas I refer the Deputy to the Action Plan for Jobs 2014.