Vol. 436 No. 1
15 Mr. Cullen asked the Minister for Finance if he has satisfied himself with the employment targets as set out for the National Development Plan, 1994-1999, in particular the predicted net employment growth; and if he will make a statement on the matter.
The development measures in the National Development Plan together with the necessary domestic policies should lead to a significant acceleration in the pace of job creation. Over the plan period it is estimated that about 200,000 jobs will be created in industry, services, natural resource sectors and construction. The plan details where these jobs will be created. Many of these jobs will be permanent and many more will be sustained during the period of the plan. In addition, many thousands of jobs which would otherwise be under threat will be protected by the measures in the plan. These jobs will translate into net non-agricultural job growth of between 70,000 and 100,000 over the period of the plan depending on the level of wage competitiveness improvement achieved and the strength of the growth in the world economy.
I am satisfied that the targets set out in the plan are reasonable.
Will the Minister of State explain how the net target figure for employment is 20,000 better than the Taoiseach's minimum which I understood was 50,000? I cannot give the details but I recall it and could get it from the record for the Minister. How does the Government arrive at the supposition that the shortfall in funding will not impact on the net employment target? I have heard the Minister respond that she is confident we will get all the money. Is she confident that we will get all the money in constant 1993 prices or its equivalent? Does she accept the contention made in the recent speech by the Governor of the Central Bank that up to half the causes for the increase in unemployment can be found in domestic policy failures, such as tax policy and welfare traps? To what extent will the Government address this matter?
In relation to the last part of the Deputy's question, that arises from a paper given by a delegate of the Central Bank, Mr. Browne. I think a paper presented by Barry and Bradley, which does not give quite the same figures, is a better specified model. Certainly, domestic policies have contributed in part to the increase in unemployment but world factors and our demographic pattern have contributed also. There are 25,000 more people currently coming on to the labour market having left school than are retiring and that situation is likely to continue for the next ten years.
Would the Minister accept that most of the rise in unemployment is the result of domestic policy, stated by the Governor of the Central Bank?
I refer the Deputy to the paper by John Bradley and Frank Barry in the Economic and Social Review of a couple of years ago.
A softer option.
On the point the Deputy made in relation to 1993 prices, what we will draw down eventually will depend on the relationship between the IR£ and the ECU. Given the turbulence we have seen in the currency markets over the past year I could not attempt to forecast with any accuracy the relationship between the IR£ and the ECU between now and 1999.
Will we get the 1993 equivalent?
In relation to forecasts——
The Minister is bluffing and she knows it.
——our forecast is that net non-agricultural employment will expand by between 12,000 to 14,000 persons per year. Our employment performance can improve but it will depend on our wage competitiveness vis-à-vis our trading partners. Estimates based on the Department of Finance economic model is that for every 1 per cent improvement in competitiveness we can achieve an extra 4,000 jobs at home from spending under the National Development Plan. It is important to say that this variable is under our control. The effectiveness of the plan in achieving its employment targets will depend on the extent to which we discipline ourself on incomes over the period of the plan to ensure that we get the best long term value from investments made under the plan. That depends very much on ourselves and whether we are prepared to ensure that we get maximum value.
The achievement of the job targets will depend on the situation in Europe. It is of concern that the European economy is showing a net loss of output this year of 0.5 per cent and the outlook for the European economy is not too optimistic in the short term. I hope we will get serious growth initiatives at European level that will ensure the markets to which we sell our goods expand. That is a way we can get the best value from investments made under the National Development Plan and out of the growth in output which we are seeking to achieve under the plan. We need to ensure that sustainable jobs are created and we get the best long term return from expenditure under the plan.
Employment forecasts are sensitive to the situation in Europe and in the countries with which we trade, as well as to the competitiveness of our goods and services and changes in exchange rates. We will do the best we can at home to ensure that we get the best value in long term job creation.
The Minister made a very long reply.
I thank the Minister for her meander and for her suggested reading material. Is she aware that the former plan, the 1989-93 National Plan, promised to create 35,000 jobs a year but unemployment went up by 100,000 during that period? Would she further agree that when all the figures are extrapolated, job growth and job loss figures, she is depending on emigration for unemployment not to reach 400,000 by the turn of the century? What level of emigration will there be over the period of the plan? Given that we have a net job growth of 12,000 jobs, 3,000 fewer working directly in agriculture and 25,000 additional school leavers each year seeking jobs, does she agree that under the plan we face the horrific prospect of unemployment reaching 400,000 by the year 2000?
As I have told the House before, this plan is but one leg of the Government's economic policy. It will be complemented by other aspects, including budgetary policy, which my colleague, the Minister for Finance, will unveil in due course. We hope to present a pro jobs budget in addition to a pro jobs national plan.
Is it the wooden leg?
In relation to the jobs figures contained in the 1989-93 plan——
What about tax levels?
The last plan, unlike this plan, presented gross job targets. Those gross targets have by and large been met. When drawing up this National Development Plan we were concerned, because it was important to look at the real world——
What about emigration in the real world?
——not only to present gross job targets. I can give Members details of gross job targets in various sectors, for example, in industry we are predicting a gross job target of 120,000; in tourism we are forecasting the creation of 29,000 long term jobs; in transport we are anticipating that 14,000 jobs will be created. In addition we prepared the figures for net job creation——
The Minister is waffling on again.
Brevity.
This is a snow job.
We ran the proposals in the National Development Plan through the Department's economic model and we then arrived at our estimates.
Order. Will Members allow the Minister to respond to the question?
Will the Minister answer my question on emigration?
The various elements of the Government's policy, include something that the Progressive Democrats in Government failed to do, which is to look at the tax treatment of the lower paid——
We never thought up the income levy.
——and the integration of the tax and welfare system, for which this Government has appointed a Minister with specific responsibility.
The identity card system to criminalise everybody on social welfare.
On the question of reform of our economic policy, we will deliver an economic policy, of which the National Development Plan is one element, that will ensure the best long term return in terms of output and employment.
I appreciate that we have been talked out by the Minister and like the east coast of England, we are snowed under with nonsense. Does she accept that the £600 million which was lost from the National Development Plan will have an effect on employment? Does she agree that when she uses the term "net non-agricultural increase in employment" she is concealing a job difference of 4,000 in the figures she is now using?
Will the Minister explain, especially now that the Taoiseach is in the House, how he gave a net increase target of between 50,000 and 100,000 jobs and she is talking about 70,000 to 100,000 jobs, in view of the fact that the only change is that we have lost £600 million?
As I told the House before, as Deputy McDowell arrived from the Law Library to hear it——
The Minister is obviously rattled.
Order, please.
——this Government is confident that——
Deputy McDowell is self-reliant.
Please allow the Minister of State to respond.
This Government is confident, based on the quality of our programmes and plans, that following the mid-term review we will be in a position to draw down the full amount of money set out in the National Plan. As we are negotiating in Brussels, unlike Deputy McDowell we are not in the business of talking this country down and talking down what we are looking for.
We intend to implement the plan in full and achieve the job targets.
