asked the Minister for Finance if he will give the total estimated cost to the Exchequer of unemployment at the end of January 1986 figure in terms of: (a) loss of tax and PRSI revenue; (b) cost of payment of unemployment benefit or assistance or other social welfare payments; and (c) other revenue losses to the Exchequer; and if he will make a statement on the matter.
Ceisteanna — Questions. Oral Answers. - Unemployment Statistics.
12.
The 1986 post-budget allocation for unemployment assistance, excluding smallholders, unemployment benefit and pay-related benefit paid in conjunction with unemployment benefit comes to a total of £658.66 million. This is a direct cost to the Exchequer.
Apart from the fact that it is an entirely notional concept, the revenue loss due to unemployment is incalculable in the absence of a wide range of mutually consistent assumptions on the economic conditions which would be required to achieve and sustain a low level of unemployment over the longer term. While the overall revenue position of the State should be considerably enhanced in a situation of full employment, it would, as the Deputy is no doubt aware, be totally fallacious to assume that the additional revenue which might arise in those circumstances could be spent now or that such State spending now would be consistent with the achievement of full employment in the future.
I take it from what the Minister has said that there is nothing he can do about unemployment.
All I was doing was answering the Deputy's question.
He was right anyway.
He was arguing that no money is available to create jobs because that would create further debt and therefore be self-defeating. Is that what he is saying?
No. I am cautioning the Deputy against making hasty assumptions about what one would achieve if one spent a given amount of money now in terms of unemployment. You cannot make the calculation very easily because a number of areas are involved. First, you have to be able to borrow the money. There must be somebody who has it and is prepared to lend it to you. That is a limiting factor. Whether you want to spend it or not, whether you think you can service it or not, there has to be somebody who will give it to you.
The second point is that the amount of revenue you would get in a full employment situation depends entirely first on the tax code obtaining at that time and also on the level of income. If you could employ everybody at £5,000 a year you would get a different yield revenue from that than if you could employ everybody at £10,000 a year or £15,000 a year as the case may be. That is another one of the range of mutually consistent assumptions, to use the jargon of my reply, which you would have to make. It is not really possible to make the calculation that the Deputy is seeking to make. However, to answer his interjection at the beginning which was to suggest that there is nothing the Government can do about unemployment, this is far from being the case. The Government are doing the very maximum they can do in very straightened financial circumstances. We are providing substantial sums for a variety of job creation agencies. We are establishing a new corporation in the form of the NDC to assist in the creation of employment.
(Interruptions.)
We have introduced an enhanced employment incentive scheme plus a PRSI holiday for employers who take on additional workers. All of these measures are being implemented by the Government to assist in the creation of employment. Furthermore, measures have been taken in the budget to reduce the burden of income tax with a view to creating incentives for the creation of employment and additional effort.
It is difficult to know which begets which, the long preamble or the long answer.
(Interruptions.)
It is the mischievous questions which are the cause.
It is definitely my question. The Minister said it was not possible to make the estimation that I requested in relation to the loss of PRSI revenue and tax revenue. Does he not think it reasonable to assume, taking the average tax paid by a PAYE worker at present of around £2,000 to £2,200 per year, that that would be a reasonable basis for an estimation, as an average?
No, because obviously in situations of limited money if more people could be employed on existing rates of pay they would be employed. However, the money is not there to employ people at present rates of pay. Presumably, if one were going to employ substantially more people, the extra group possibly would be on lower rates of pay. How much lower or whether the difference would be significant or not one could not say. One would have to make assumptions, which is extremely tendentious. However, it is an interesting calculation which I will suggest.
Some other time, some other place. Question No. 13.
A Cheann Comhairle——
I have called the next question.
I did not rise at all.
You are going to get into a debate.
Evidently there is no hope for the unemployed. The Minister said that the cost would be incalculable and I would agree entirely, in every sense of the word.
Not capable of being calculated.
Incalculable is what the Minister said.