Written Answers. - Skills Shortage.
Michael McDowell
Question:
28
Mr. M. McDowell
asked the
Minister for Enterprise and Employment
his view on reports that up to 6,000 job vacancies cannot be filled in view of a skills shortage in the workplace and disincentives in the form of high taxation in low paid jobs.
[13658/96]
I understand that the figure of 6,000 emanates from a recent report in a sunday newspaper, which quoted the Small Firms Association as stating that there are shortages of available staff to fill vacancies in both the highly skilled and blue collar sectors of Irish industry. I am not aware of the methodology that was used in arriving at this figure.
With regard to possible shortages in the highly skilled areas, I recently pointed out to this House that the availability and quality of skills of our labour force is one of the key competitive advantages that we have in attracting inward investment. It has a central influence on investment and location decisions of overseas companies and so it is imperative that this competitive advantage is maintained.
I also mentioned that in the light of the pace of technological change, the difficulties which accordingly arise in making accurate and timely forecasts of manpower needs, skill shortages can develop. At present, for example, there are world-wide shortages of software skills and of experienced electronics engineers and technicians. Potential difficulties in these areas in this country have also been identified and my Department is taking steps, in conjunction with the Department of Education which has primary responsibility, to ensure that the future needs of industry for these types of skills will be met through the universities and the regional technical colleges.
I am also aware of a shortage of language skills in the area of telemarketing operations. Steps are being taken to address this by the relevant State agencies. It will continue to warrant focus by both the education and the training systems to improve standards in this area.
I should point out that, although the number of vacancies notified by FÁS has increased substantially over the past year, the FÁS Employment Service is continuing to achieve a very high level of success in its endeavours to assist employers to fill such vacancies. FÁS has informed me that it is continuing to monitor very carefully, in conjunction with the various interested parties in industry, any possible emerging skills shortages over the next few years. Where any such instances are identified, FÁS will tailor its programmes to deal with the situation.
The Government is continuing to improve the after-tax income of workers and, in particular, workers on low incomes. In this context, the general tax and PRSI position of the low paid has been improved in recent budgets. A range of reforms have already been implemented, which include: exempting low incomes from health and employment levies; increasing standard rate income tax bands; increasing personal income tax allowance and introducing, in the 1995 budget, a PRSI allowance of £50 per week for full rate contributors so as to focus relief on low income earners. This allowance threshold was increased substantially in the 1996 budget, to £80 per week.
As well as seeking to improve the after-tax income of low paid workers, the Government has made considerable progress in reducing the cost of employing people and, thus, easing the competitive difficulties of business, through the introduction of a lower contribution rate for employers' PRSI in 1994, which has been improved in the 1995 and 1996 budgets. Following this year's budget, two-thirds of all jobs will now be subject to the new low rate of 8.5 per cent. This Government will make further progress in the area in its next budget.
I recently launched a major policy document on the labour market which clearly acknowledged the importance of tax reform as a central policy instrument to achieve our labour market goals. The strategy paper, in addition, specifically highlighted the priority areas for action which are aimed at improving the after-tax income of workers, particularly those on low incomes, and reducing the cost of employing people.
In addition to tax and PRSI improvements, the Government in its 1966 budget placed a clear focus on improving the benefits of working by implementing measures aimed at easing the transition from unemployment to work. This is being achieved by a combination of improved child benefit and improved FIS which is tilting the reward to work. These measures are being reinforced with further pro-employment initiatives such as the potential for the long-term unemployed to retain the medical card for three years and child dependant allowance for 13 weeks after securing employment.
While I am satisfied that the shortages to which I referred earlier are the most pressing at present, I would also be concerned about the emerging skills and needs of the future, and I am concerned that this major strategic issue should be tackled. This subject will be addressed in the forthcoming White Paper on Human Resource Development.
