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Dáil Éireann debate -
Tuesday, 14 Feb 1995

Vol. 449 No. 1

Written Answers. - Job Cost Comparisons.

Ned O'Keeffe

Question:

196 Mr. E. O'Keeffe asked the Minister for Enterprise and Employment the comparison between the cost of a job created under the BES and IDA or other State-aided jobs. [3256/95]

I understand from Forfás that the grant cost per job created and sustained in companies grant aided by the former IDA in the period 1988 to 1994 was £12,786. This figure is based on the sum of all IDA grant payments over a seven year period divided by the number of first time jobs created and still in existence at the end of that period.

For the purposes of this calculation, a first time job is defined as the increase in employment in a company over and above the peak employment level in the previous five years and related to a specific investment programme agreed with the IDA, or Forbairt and IDA Ireland as it is now.

All grants paid by the industrial development agencies are incorporated in the calculations, including capital, leasing, training, employment, interest subsidies, rent reduction, research and development, technology acquisition, management development, and feasibility grants, as well as loan guarantees and equity.

The primary role of the cost per job sustained indicator is to allow my Department to monitor over time the grant cost of job creation in industry. As such, tax reliefs which are allowed by the State such as the BES are not included in the calculations, nor are tax revenues accruing to the Exchequer from the companies involved.

The BES provides that investments of up to £25,000 per annum in a business may be made by an individual who then qualifies for relief on the investment at his or her marginal rate of tax. The Deputy may be aware that the range of businesses which may receive BES support is considerably wider than that which is grant aidable by the industrial development agencies. For example, certain tourism and agricultural sectors are included under the BES. Conversely, a number of companies would be in receipt of support from both the BES support and the industrial development agencies.

Because of the factors outlined above, it is not possible to make a meaningful comparison between the grant cost of jobs supported by the State agencies and job gains accruing in firms which received BES funding.
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