Vol. 397 No. 4
13 Mr. Gilmore asked the Minister for Industry and Commerce if he will give further details of the view expressed by him in a report (details supplied) that the job creation performance of industry was disappointing, but that employment growth would suddenly start to happen quite rapidly if economic conditions could be kept correct; and if he will make a statement on the matter.
The improvement in our general economic situation since 1987 has been directly reflected in a turnaround in manufacturing employment, which has gone from an average annual net loss between 1980 and 1987 of around 4,000 to a net gain of 6,000 in the year to April 1989. This reflects improved cost competitiveness and increased confidence by industry to undertake new investment. Total employment in the services sector has also increased substantially since 1986.
Because of the time lag between decisions to undertake new investment and the appearance of jobs on the ground the full benefits of the improved situation in industry may not yet have been fully realised. The very positive indications of a continued increase in employment in the FIE-CII survey of employment trends earlier this year indicate that private sector employment is expanding steadily.
I would be very hopeful that, if we maintain our commitment to improve the public finances, achieve real reform in the tax system and maintain cost competitiveness, significant further net job creation can be achieved in the short term.
May I take it that the Minister has changed his mind since 13 March when he said that the performance of industry in relation to employment creation was disappointing? Would he accept that the climate for employment creation during the past number of years, given the Programme for National Recovery, low wage costs and low inflation, could not have been better and that these circumstances are now about to change, given that interest rates are increasing and that the Government have missed the boat offered to them under the Programme for National Recovery in relation to the creation of employment?
I am looking at what I said on 13 March and I do not see anything which is in conflict with what I am saying here today. The fact of the matter is that, instead of an average net loss of 4,000, which was the case for every year in the eighties up to 1989, in manufacturing employment, the year to April 1989 showed a net gain of 6,000, which is a turnaround of 10,000 in manufacturing employment alone. That is very satisfactory. If this trend can be continued and the figures grow somewhat further it will be a creditable performance.
Is the Minister aware of the report published by the CSO which indicates that between April 1988 and April 1989 employment dropped by 1,000?
Manufacturing employment rose by a substantial number. In relation to the losses in particular areas of employment, these were mainly in the public sector as a result of deliberate Government policy which was right and which most people on reflection would agree was right.
I ask the Minister to clarify this matter for us once and for all. A number of Ministers at various stages have expressed disappointment about the performance of the private sector in relation to the creation of employment and subsequently have pulled back from it. Is the Minister confirming or denying the report contained in The Irish Times on 13 March in which he is reported as saying that the job creation performance of industry was disappointing? Can we be told what exactly is the Minister's view of the performance of industry in relation to job creation? Is he disappointed or happy with it? We know what the figures are.
I can put the matter beyond doubt by reading what I am reported as having said in The Irish Times, some of it is a direct quotation while some is not. The relevant part reads:
The job creation performance of industry was "on the face of it slightly disappointing" but the Minister was confident that employment growth will suddenly start to happen quite rapidly if the economic conditions can be kept correct.
The economic conditions are——
Let us have finality on this question. I want to call another Deputy. I hope Deputy Gilmore will be brief.
On what does the Minister base his confidence that the performance of industry will improve from their "slightly disappointing" performance to date given the fact that interest rates are increasing and the indicators are that the circumstances which have existed up to now in relation to the creation of employment are not going to continue?
I have no reason to agree with the Deputy when he says that the favourable circumstances are not going to continue. At any given time they are probably not as favourable as one would wish, but if our interest rates are four or four and a half percentage points lower than the rates in Britain this is very favourable from our point of view. If our inflation rate is half or less than half the inflation rate in Britain, that is very favourable. Needless to say, I would love if it was a quarter of the rate in Britain and not just half. Given the history of the past 20 years, when our figures were consistently higher than those in Britain, the position in this country is much better.
A final question from Deputy Garland.
The Minister stated that the net increase in employment in industry last year was 6,000 but when we consider this in the context of 230,000 unemployed it is going to take 40 years to reduce unemployment unless the Minister sees substantial increases in public sector or service sector employment. Would the Minister like to comment on this?
That is not the way it works.
The trouble is that it does not work.
