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Fine Gael’s budget plan has ben launched.

Fine Gael Leader Enda Kenny TD and Finance Spokesman Michael Noonan TD have published a far-reaching Pre-Budget Plan to create jobs, stabilise the Exchequer and get Ireland back on track over the next four years.

Deputy Kenny said Fine Gael aims to create 100,000 new jobs, achieve the 3% deficit target and the €15 billion worth of adjustments within the original four year timeframe. Job creation and fairness will be the over-riding principle, within the financial constraints.

The plan will be built around three pillars:

1. Limiting tax increases to one-quarter of the adjustment next year, and one-third of the adjustment over four years;
2. Radical public sector reform to end waste, inefficiency and duplication, starting with the political system;
3. And a jobs and stimulus plan.

Deputy Kenny said: ‘There is a better way, and a fairer way, than anything offered by the current failed Government. Fine Gael will make jobs and economic growth a precondition, not an aspiration’.

“International experience shows clearly that cuts in spending are more effective at fixing deficits and are better for growth and jobs than tax increases. Confronting waste, inefficiency, duplication and redundancy in public spending should be the focus of Ireland’s budgetary adjustment.”

Tackling the Deficit

Key proposals to tackle the deficit include:

• Protecting pensions, including contributory and non-contributory old age pensions, those for widows, the blind, people with disabilities, and carers’ allowances, while collecting some extra tax from those with generous occupational pensions;
• No income tax increases in 2011 before recovery takes hold, and limiting income tax increases to half the levels proposed by Fianna Fáil over the entire four years;
• A much greater emphasis on closing tax loopholes for the rich, including suspending property-based tax reliefs and tightening the rules for tax exiles;
• A fairer approach to Fianna Fáil’s proposed annual recurring property tax on the family home;
• Cutting tax relief on schemes offering pensions greater than €60,000, while protecting pensions tax relief for middle income families;
• 18,000 more voluntary redundancies in the public sector than the Government proposes;
• Targeting the €3 billion worth of annual social welfare fraud through the establishment of a single Payments and Entitlements system.

Fine Gael recognises the need to raise more revenues from property. But a residential property tax would unfairly hit the young generation already burned by the housing bubble. So we will increase the second home tax, cut Capital Acquisitions Tax thresholds and introduce a low Capital Gains Tax on the site values of primary residences. Alongside this, we will cut stamp duty for families trading up and down, and provide greater relief for working families in mortgage distress.

Supporting jobs and growth

Deputy Noonan said: ‘We will strengthen significantly the reforms needed to cut business costs, to improve productivity, and to incentivise and facilitate people to acquire the skills needed to re-enter the workplace’:

• Replacing the minimum wage cut proposed by Government with a cut in the jobs’ tax to encourage people off welfare and into work;
• Accelerating capital allowances on business software investments to support a local high-tech industry;
• A €10 million one-off marketing budget for State agencies to restore Ireland’s battered business reputation across the globe;
• No change in either the standard or top rates of income tax, or the 12.5% rate of corporation tax;
• Abolish the travel tax subject to deals on re-opening routes with Ryanair and Aer Lingus;
• Abolish the lower 8.5% rate of employers’ PRSI on staff earning below €356 per week for at least three years to reduce employment costs;
• A 1.5% cut in the lower 13.5% VAT rate to re-direct consumer spending away from imports, and into labour-intensive services such as trades, restaurants, hotels and newspapers;
• Increase DIRT to 30% to encourage higher levels of household consumption;
• A pre-announcement that home insulation and other residential and commercial energy saving subsidies will terminate in 2013, leading to a bringing forward of demand in the intervening two years.

Deputy Noonan added: ‘Fine Gael’s job stimulus plan, NewERA, will use streamlined and restructured semi-State companies to invest an additional €6-7 billion, over and above current plans, in investments in “next generation” energy, broadband, forestry and water infrastructure. In discussions with the IMF, Fine Gael has confirmed that funds from the National Pension Reserve Fund and proceeds from the sale of State assets remain available, under conditions to be agreed, to finance the NewERA stimulus plan.

Achieving greater public sector savings & reform

Deputy Kenny said: ‘The split between spending reductions and tax increases in the Government’s four year plan moves in the right direction but there is room for additional spending savings from public sector pay of at least €900 million by 2014. This will make room for targeted initiatives to support employment and economic activity’:

• Cutting the number of national politicians by 35%;
• Cutting the threshold for application of minimum 30% effective tax rate to €250,000 from €400,000 at present (with marginal relief from €125,000);
• Reducing the size of the public sector by 10% – just over 30,000;
• Reducing the size of the core civil service working in Government Departments by a third through the establishment of shared service operations;
• Implementing at least half of the McCarthy report recommendations, and 80% of the savings recommended by the Local Government Efficiency Review;
• Close FÁS and the HSE and abolish 145 quangos.

Deputy Noonan concluded by saying: ‘Extending the period of the adjustment will only force Ireland to borrow more money and pay more back in interest, so we will aim to reach the targets within four years’.

Go to www.finegael.ie for more.

On Saturday 11 September, I was asked to speak at a meeting organized by Dublin Young Fine Gael under the title Vision for Dublin.

Thanks for inviting me here today and well done on the initiative in putting an event like this together. This is absolutely what you guys should be about.

Mark spoke to you about the manufacturing side of technology. I want to talk to you about the development and services side. I want to talk to you today about a vision for Dublin as the high-tech capital of Europe.

You’re all familiar, I’m sure, with Silicon Valley in the US. But what does it mean to you?

• For many it’s simply a location, a physical area where similar businesses working in a particular area of technology are all located.
• For others it’s a brand for that type of technology work – the way Coca-Cola is the brand for all cola. So that if you hear that a company is located in Silicon Valley, immediately you imagine it as being involved in cutting-edge high-tech stuff.
• Still again, for others it’s a way of thinking: where young men and women walk out of university and have the confidence and ability to start their own businesses. Where a premium is placed on innovation and creativity; and staff sit around playing pool and table tennis, and companies have mission statements like: ‘Don’t do evil’. It’s cool, it’s young, it’s fresh. It’s the future.

It’s also extremely successful. Last year somewhere in the region of 40% of all venture capital funding in the US went to Silicon Valley.

For those of you who aren’t familiar with venture capitalism, this is when private individuals or companies invest their own money – a lot of the time in start-ups or growth companies pushing a new product or idea. They’re not investing in the market, they’re not buying shares per se. They are putting their own money (and sometimes expertise) in to a new project they believe will succeed.

When someone is putting their own money on the line, in such quantities, then something is up, something good. And almost half of venture capital money in the US is going in to this one industry in this one area.

And my vision for Dublin is that we do what they’re doing there, here. We position ourselves as the silicon valley of Europe, the high-tech capital of the EU.

The best thing about this vision is that we’re not even starting from scratch. We’re kind of leaning in the right direction but we need a couple of things to happen to push us over. We have a history with technology. At one point in time we were the second largest exporter of computer software in the world. This little island. Those days are gone now as production even in that line of things is moving to cheaper countries.

But that’s OK, because with the establishment by Google of its European and North African HQ here in Dublin, the paradigm shifted. Companies weren’t coming to Ireland because of our skilled workforce alone, they were coming for a whole host of reasons – accessibility, the euro, quality of life, young vibrant culture.

Dublin could now be a place for skilled workers from all over Europe to come and work, together with Irish graduates, and Google recognised this. And the coming of Google, and others, has made the ground extremely fertile. And now we’re growing great home-grown produce.

Just around the corner from the Morrison Hotel is a small loft-type office building. I went up to meet some guys there who are running a start up that develops iPhone apps. Very cool stuff and their office is just like you’d imagine it. Big room, about 10 people at Macs and laptops, posters on the walls, listening to music, a fusball table.  A year ago when Dublinbikes was launched, taking the initiative, they developed an app for the system free of charge. It lets you know how many bikes are at the spots, where there’s a space to drop one back. The company behind Dublinbikes, JC Decaux had their own app which they had used in other countries so this app that these guys worked on had to be shut down.

But what theydid was in fact better than what JC Decaux had. JC Decaux are huge, they run these free bikes all over Europe. They must have spent a fortune employing a big tech company to develop this app. And then a bunch of guys in Dublin, in a small office, developed a better one, for free.

We saw the same innovation in an earlier presentation with the Visit Dublin mobile app. That’s our potential right there. We’re also at the cutting edge of digital animation. One of the Oscar winners for Avatar learned his animation skills in Ballyfermot Art College, and the Book of Kells film developed here in Ireland was nominated for an Oscar as well. So in digital animation we really are at the cutting edge globally.

And that’s what we need to capitalise on. How? I’m going to give you six ideas. They’re not mine. They exist out there in the ether, but we need to put them together.

1. First, we need to recognize the links between Silicon Valley and Dublinthat already exist, and build on them:
   • Dublin is twinned with San Jose.
   • An Irish Innovation Centre has been established in San Jose.
   • There is an Irish Technology Leadership Group that is tasked with developing Irish IT firms in Silicon Valley.
   • In April the President and founder of that group said that one of the next things we needed to do was to establish an actual physical link between the Valley and Dublin. By that he meant: a direct flight. You can’t fly from Dublin to the West Coast of the US anymore. It seems counterintuitive that one of the first steps in creating a high tech virtual partnership between two places would be the creation of an actual physical link. But it makes sense. If a global player is to establish a European arm in Dublin they need to be able to get here quickly and easily. Easier travel encourages more travel, it’s that simple.
2. Broadband infrastructure
   To be serious about being a base for such an industry we need to rapidly evolve our infrastructure in the City. We need to invest in state of the art broadband in Dublin City centre – this is the critical infrastructure of the future; akin to railway lines of the past and roads in the recent past. We are miles behind. I was in Toronto eight years ago doing student summer work, I went to visit my boss. He had one machine controlling all the media in his house, with music, the web, streaming television, when we were still using dial-up at home that took about five minutes to connect. Things are better now but the infrastructure is still lousy.Google is currently piloting a new type of fibre broadband with speeds faster than anything currently on the market. I knew they’d want to start setting up trialing it in Europe so I went to them and suggested Dublin. They said that they would roll it out here in Europe, but not in Dublin. Why not? We have to wake up, realize we’re aiming at a moving target, and get ahead of other countries, not just catch up.
3. Expand the Digital Hub
   Right now, this is a cluster of over 100 high tech and creative enterprises and we can grow it into a high-tech version of the IFSC, attracting foreign companies as well as nurturing home-grown start-ups. We take the Digital Hub, which already exists and is successful and use it as a nucleus for the expansion of our own Silicon Valley proper. I know we’re talking about a virtual market place here but what Silicon Valley tells us is that for centres of excellence to emerge and be successful, the component parts must be physically near to each other.
4. Build Dublin as a content management hub – a foundation for ‘cloud computing’ across Europe. More and more, file storage, emails and other programs will stay online, stored in huge servers. We can provide this physical base. This basically means positioning Dublin as the internet server for other European countries. Think of it as an electricity grid-like method of providing internet based computing. No one else is doing this and it’s going to become more important in the coming years as computer platforms change and internet and computer use relies more and more on on-line and off-site management of information.
5. Widen the UCD-TCD Innovation Alliance
   We need to include other universities and third-level institutes, including a new University of the Arts. Create more shared laboratories and incubation space, to foster greater collaboration and the delivery of an idea to the early product development phase. This is about encouraging creativity. Putting education, training and research at the centre of this new economy. Silicon Valley works so well because of its formal link with Stanford University.
6. Venture capital
   Encourage the clustering of venture capitalists and venture capital firms to invest in emerging enterprises and drive the continued growth of the high-tech sector in Dublin. Silicon Valley receives 40% of America’s venture capital funding. We should have a similar aim for Dublin in Europe.

Other elements will also play a part, and forums like this are a great way of hearing and developing these ideas. Elements that can drive Dublin as a modern urban space to attract companies and workers from abroad, with new ideas like electric car clubs, smarter waste management, better public transport, energy efficient buildings and a living, breathing city centre. A better quality of life will attract a better quality of investor, a better quality of worker.

We need a new economy, we need to invest in young entrepreneurs, start-ups and innovators. One example of where there is huge potential for each of these is the high-tech sector – things like software development, electronic innovation and internet services. We’ve shown with Google and others that we can attract the big players, now we need to merge that with home-grown talent, that we know we have. Ultimately, this is about developing the same thing with the high-tech sector that worked in the IFSC with the financial sector.

Thank you

Click here to see my interview on Ireland AM after I was elected a Fine Gael Councillor.

Click here so see my speech on Green Energy.