Vol. 432 No. 3
1 Proinsias De Rossa asked the Taoiseach if, in regard to his speech to the Irish Management Institute in Killarney, the proposed task force to promote jobs in the services sector has yet been established; the terms of reference of the task force; when it is likely to report; and if he will make a statement on the matter.
I am pleased to inform the Deputy that the Task Force on Services, which I have established, held its first meeting on Thursday, 10 June 1993. A list of the members of the task force will be circulated in the Official Report.
The terms of reference of the task force are as follows: to examine the existing structure of the services sector of the Irish economy and to assess its potential for development and jobs; to consider the contribution which specific subsectors of the services sector can make in producing more jobs; to decide what issues can be progressed to policy recommendation by September and if any require a longer timescale for consideration; and to produce specific proposals by end-September, for consideration by Government, on measures to significantly increase the number of jobs in the services sector.
As regards a reporting date, the Deputy will note that the terms of reference in themselves require by end-September that the task force prepare proposals for consideration by the Government. Areas requiring longer-term study will also be identified.
Employment in service activities, which include those in firms in all sectors of the economy, accounts for some 70 per cent of total employment in the more developed countries. In the United States, for example, the service sector, broadly defined, now accounts for 77 per cent of all jobs. In contrast, employment in manufacturing has declined erratically, but in a continuous downward trend, over the past 15 years to 16 per cent of total employment. The corresponding proportions of total employment for Ireland are 59 per cent for services and 28 per cent for manufacturing respectively. Not all countries will go the way of the United States, but I believe it is critically important to ensure that any policy changes in this country, necessitated by trends such as those I have mentioned, be considered by Government and, if approved, be implemented quickly. In that context I look forward to the report of the task force at the end of September.
I understand that significant progress has been made by the task force in mapping out the areas it will examine in the coming months and I look forward to its report.
Following is list of members:
Task Force on Jobs in Services
Chairman: Paddy Teahon, Secretary, Department of the Taoiseach.
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Members: |
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1. Agnes Aylward |
Department of Tourism and Trade |
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2. Michael Bannon |
UCD |
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3. Séamus Bannon |
An Bord Tráchtála |
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4. David Begg |
Communications Works Unions/ICTU |
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5. Ron Bolger |
SKC/Telecom |
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6. Eamonn Carey |
Department of Enterprise and Employment |
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7. Enda Connolly |
IDA |
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8. Patricia Curtin |
FÁS |
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9. David Duffy |
Prospectus Management Consultants |
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10. Tom Ferris |
Department of Transport, Energy and Communications |
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11. Alan Gray |
Indecon |
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12. Yvonne McDermott |
Ericsson |
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13. Matt McNulty |
Bord Fáilte |
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14. Ann Nolan |
Department of Finance |
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15. Anne O'Connell |
Coopers and Lybrand |
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16. Eoin O'Neill |
Trinity College |
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17. Julie O'Neill |
Office of the Tánaiste |
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18. Eleanor Ní Bhriain |
Department of Education |
I thank the Taoiseach and welcome his announcement that the task force has been set up. Can he indicate in what specific sectors he believes there is scope for improvement? Can he indicate what investment will be required and if it will involve Structural Funding from the European Community?
It is a little early to make any assessment as to what funding may be required or the specific areas which can make the greatest contribution. We will leave that job to the task force which has been well chosen from the various sectors. It is a matter for them to examine where the greatest contributions can be made and to pass that information back to Government for action.
I assume that in establishing the task force the Taoiseach must have had some idea as to where jobs could be created as a result of this initiative. Will he indicate what specific sectors can make the greatest contribution in this area?
I am not making any exclusions in the services sector. I have set up a task force to carry out a range of assessments throughout the whole sector. It is clear we need more jobs and every area must contribute to the maximum extent possible. I believe there is a greater contribution to be made by the services sector.
(Limerick East): Is the Taoiseach aware that the perceived growth in jobs in the services sector, both domestically and internationally, is due partly to the fact that services provided in-house in manufacturing industry such as cleaning, maintenance and catering, were previously defined as manufacturing jobs but now because they are contracted out they are defined as services jobs? I would ask the Taoiseach to draw the attention of the task force to that point so that any evaluation is made on the real premise rather than on a false premise.
The membership of the task force clearly understands the trend to which Deputy Noonan has referred. In recent years there has been a trend in that direction in Ireland and in other countries. The Deputy can take it from me that the task force will bear that in mind when making that assessment.
Does the Taoiseach accept that, to a large extent, official policy has discriminated against the services sector? Will the task force have the opportunity to make recommendations on taxation issues? He will recognise that VAT at 21 per cent on personal services, tax at 40 per cent on profits on the services sector and the PRSI burdens mean that creating employment in this sector is particularly handicapped by tax impositions.
We should not have an extension of the subject matter.
That is a separate matter, it relates to taxation.
I asked the Taoiseach whether the terms of reference permitted the task force to recommend on taxation issues which is central to a successful strategy to promote the services sector. Therefore, it relates directly to the question.
That is a matter for the Chair to decide and I would prefer if the Deputy tabled a question on that aspect of the matter.
The question relates to the terms of reference of the task force.
The question refers to the terms of reference of the task force and is specific in that regard.
The Deputy should not question my ruling.
I am not questioning your ruling, Sir, I am merely questioning whether the taxation policy on the services sector would be legitimately within the terms of reference of the task force. In my view it is and this question should be allowed.
The promotion of jobs is related to taxation matters, but the Deputy's question is an extension of the one tabled.
Call in Dr. Power.
What are the terms of reference of the task force?
I will repeat them again. As I stated, the terms of reference of the task force are as follows: to examine the existing structure of the services sector of the Irish economy and to assess its potential for development and jobs; to consider the contribution which specific sub-sectors of the services sector can make in producing more jobs; to decide what issues can be progressed to policy recommendation by September and if any require a longer timescale for consideration; and to produce specific proposals by end-September, for consideration by Government, on measures to significantly increase the number of jobs in the services sector.
In regard to matters which can be progressed to policy, will the Taoiseach ask the task force to examine two issues, first, the discrimination against the services sector in the tax code and, second, the impact on job creation in the services sector of delays by the Government in fulfilling its promised legislative programme in regard to matters such as conveyancing, the Land Registry, the law on business tenancies and the law on occupiers' liability, all of which inhibit the development of the services sector?
It would be unreasonable to expect the task force to question matters relating to a programme for Government or to question why the Government is not implementing its recommendations. That is a matter for this House.
Deputy Richard Bruton asked the Taoiseach a question regarding the tax code and instanced the case of VAT. Will the Taoiseach agree that the most significant element of discrimination against the services sector is the 10 per cent regime for manufacturing companies which was precipitately extended to the year 2010 during the Taoiseach's term as Minister for Finance and that in retrospect, that was an unwise decision? Will the Taoiseach agree that if this task force is to tackle seriously the growth of the services sector the question of the tax regime ought to be within its remit?
The tax regime has a very wide import, Deputy.
The services sector is very wide also.
The subject matter has a very wide import.
A total of 59 per cent of employment is in the services sector.
I am sure the Deputy would be the first to recognise that without a manufacturing base there would not be a thriving services sector base.
I am not talking about one or the other.
To extend this to a commission on taxation is not the idea behind the task force.
