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Dáil Éireann debate -
Tuesday, 10 May 2011

Vol. 731 No. 5

Jobs Initiative 2011: Statements

It is just under nine weeks since the new Government assumed office, having obtained a secure and stable mandate from the people. We have agreed a programme for Government, motivated by a clear vision of an Ireland that, by the end of our term in office, will be recognised as a modern, fair, socially inclusive and equal society, supported by a productive and prosperous economy.

As indicated in the programme for Government, the success of our economic strategy will lay the foundation for the rest of our agenda for change. That economic strategy in turn is based on several essential elements that include fixing our broken banking system, restoring order to our public finances, regaining and enhancing our international competitiveness, supporting the protection and creation of jobs, radically reforming our system of public administration and rebuilding Ireland's reputation on the international stage.

We have hit the ground running. Within three weeks of taking up office, we took firm and decisive action to recapitalise and restructure the domestic banking system to restore the banks to a position where they are fit for the purpose of supporting economic recovery. Within three more weeks we re-engaged with the European Union-International Monetary Fund-European Central Bank partners to renegotiate the programme of support for Ireland.

We have also confirmed our commitment to bringing the public finances on to a sustainable trajectory and to achieving a deficit of less than 3% of gross domestic product by 2015. To this end, we have embarked on a fundamental and comprehensive review of public spending, both current and capital. We intend to use the results of those reviews as key building blocks in our budgetary plans for 2012 and beyond.

The Government is also committed to implementing a range of reforms to the domestic budgetary framework. It is our intention to have put in place by the end of June an independent fiscal advisory council and to publish, by the end of the year, a fiscal responsibility Bill which will set out a radically new approach to the management of the public finances. These important reforms will place Ireland's future budgetary framework on a more sustainable and credible footing.

Today, well within our first 100 days in office, we move forward with the jobs initiative. It comprises a set of measures that represents the new Government's first steps towards improving the economy's international competitiveness and promoting job creation. We are taking these steps against a background where the economy has seen three successive years of declining economic activity. Between 2007 and 2010, the volume of goods and services produced in Ireland fell by approximately 12%. This year, however, we can look forward to positive growth which we fully expect will accelerate as we move into 2012 and beyond.

The recently published stability programme update forecasts positive gross domestic product growth this year, a welcome development following the past three years. For 2012, my Department projects that gross domestic product will grow by 2.5%, with average growth of 3% per annum possible between 2013 to 2015.

Underpinning this expected rebound in economic activity is a strong outlook for goods and services exports. The picture emerging is one of an export-led recovery which is in line with expectations. A recovery in a small open economy such as Ireland's typically takes this form.

On foot of recent competitiveness gains and improving external demand, the exporting sectors of the economy are in general performing very well. Last year, exports increased by 9.5% in real terms, the strongest rate of growth for a decade. Looking to the future, export growth is projected at about 6.75% in 2011 and 5.75% in 2012.

Since the 1950s, Ireland has used its corporate tax regime as an integral part of its strategy to encourage growth, attract foreign direct investment and increase employment. We do not have the allure of a large domestic market or substantial public procurement to attract major international firms here, so we must use the other tools at our disposal. This approach is supported by research by bodies such as the Organisation for Economic Co-Operation and Development which points to the importance of low corporate tax rates to encourage growth in small open economies.

The Government is committed to continuing this policy approach, knowing that certainty is essential for existing and prospective investors. Our 12.5% rate of corporation tax is here to stay. It is central to our industrial policy and is an integral part of our international brand. The Government's message is, therefore, unequivocal. There will be no deviation from that position, one which also has broad cross-party support.

The corporation tax regime is a vital element of our industrial policy. However, other measures also have an important part to play. In this regard, Ireland has a very attractive research and development tax credit scheme that allows as a general measure 25% of incremental expenditure by a company on qualifying research and development to be set off against its corporation tax liabilities or, where there are no such liabilities, for the credit to be paid to the company.

Since its introduction in 2004, the scheme has influenced the decisions of many multinational firms to locate internationally mobile research and development projects in Ireland. To maximise the benefits to companies and further encourage investment and employment in research and development, I intend to amend the research and development tax credit legislation to enhance flexibility for companies in how they account for the credit, giving the option to account for it above or below the line.

Ireland's attraction for research and development activities has played, and continues to play, a critical role in encouraging foreign direct investment and creating employment. The Government intends to continue to enhance that attraction.

The jobs initiative is about encouraging employment. In that regard, I have reviewed the decision taken by the previous Government to introduce employer PRSI on share-based remuneration. This was a serious mistake and I intend to reverse it in the forthcoming finance Bill. The imposition of this charge on employers needlessly increases the costs of doing business in Ireland and would have the potential to negatively affect current employment levels and future investment decisions. Businesses operate under strict budgetary control in the current economic climate and increasing their costs is unwise. The potential loss to the economy from this measure far outweighs the potential yield to the Exchequer. Accordingly, I have decided to abolish the employer PRSI element with effect from 1 January 2011.

There is a perception that export growth is not jobs-rich which is true in general. Most exporting sectors in the economy tend to be capital rather than labour intensive. However, tourism is one very obvious exception to this general pattern. Much economic activity in the tourism industry is highly intensive in its use of labour. This is particularly true of hotels and restaurants, recreation and entertainment. In the case of tourism and exports, it is simply that the persons who purchase the goods and services come to the country to do so.

Its relative labour intensity makes it all the more unfortunate that tourism has greatly underperformed other exporting sectors. Far from expanding, as overall exports did, tourism continued to decline last year with the total number of trips by visitors to Ireland down by 13% on the 2009 level. This brought to 25% the cumulative decline in inbound tourism numbers between 2007 and 2010. Over the same period, earnings from tourism and travel fell by about 30%.

These figures reflect the scale of the challenge facing the tourism industry. They also illustrate the scale, however, of the opportunity that exists for the industry if it can get it right. Even by recovering the ground it has lost in recent years, tourism can make a substantial contribution to our economic recovery and to the creation of employment in all parts of the country.

Another strong reason we should make every attempt to capitalise on the potential of tourism is that significant investment has already taken place in this sector. Whatever about the merits of some of the schemes that encouraged this investment, we have a stock of accommodation, much of it of a very high quality by international standards, which we must now utilise to full advantage. We also have a stock of entertainment and recreational facilities that has been significantly enhanced by public investment in recent years, not to mention a transport infrastructure the capacity of which has been greatly augmented.

Overall, our tourism products are very strong. In addition to Ireland's natural attractions, we have a wide range of high quality accommodation, including hotels, guesthouses, B&Bs, self-catering accommodation and hostels, to suit all tastes and budgets. We offer a wide range of sporting and recreational facilities and events. Culture and heritage, golf, angling, walking, cycling and equestrian pursuits are all easily accessible. In recent years, holidaying in Ireland has become more affordable. These are some of the many advantages we must harness to improve visitor satisfaction and to increase the number of people from overseas who choose Ireland as their holiday destination.

While the provision of tourist facilities and amenities is important, marketing of what Ireland has to offer as a holiday location is crucial. The United Kingdom is our most important overseas market, with close to half of our overseas visitors coming from there. It is also the market that has seen the greatest contraction since the recession began. Between 2007 and 2010 trips to Ireland from Britain fell by 32%. It is critical that we see a return to growth in visits from the UK to achieve overall growth in tourist numbers. As part of a three-pronged strategy to promote tourism by encouraging airlines to improve levels of access for visitors to Ireland, tourism marketing resources will be made available for Tourism Ireland, working with the three State airports, to promote visitor traffic from destinations served by additional routes and services through co-operative marketing with carriers. The tourism marketing fund will support a strong focus on our major source markets, including the UK, to take advantage of the additional opportunities presented in 2011 by the forthcoming visits of Queen Elizabeth and President Obama. These visits present exciting opportunities to get Ireland back in the minds of potential tourists and are invaluable in terms of marketing and publicity.

The programme for Government provided for the lowering of the reduced VAT rate. Rather than applying a 1.5% reduction to the rate for all goods and services currently on the 13.5% reduced rate, I have decided to introduce a more focussed and larger reduction for certain goods and services while other items continue to be subject to the existing lower rate.

Consequently, as part of the measures to support the tourism industry, the VAT reduction will be targeted mainly at those services relating to tourism. In this context, a new temporary second reduced rate of VAT at 9% will be introduced with effect from 1 July 2011 until end December 2013. The new 9% rate will apply mainly to restaurant and catering services, hotel and holiday accommodation and various entertainment services such as admissions to cinemas, theatres, museums, fairgrounds, amusement parks and sporting facilities. In addition, hairdressing and printed matter such as brochures, maps, programmes and newspapers will also be charged at the new rate. All other goods and services to which a reduced rate currently applies will remain subject to the 13.5% rate. This measure is estimated to cost €120 million this year and €350 million in a full year. The purpose of this targeted VAT relief is to boost tourism and stimulate employment in the sector. I am confident that it will give the tourism sector a much needed shot in the arm. However, to ensure that the sector is delivering, the effects of the changes announced today will be assessed and the measures reviewed before the end of 2012 in the context of preparing budget 2013.

To encourage overseas visitor numbers, I will provide for the air travel tax rate to be reduced to zero on a date to be fixed by order.

Deputies

Hear, hear.

To be clear, the commencement of this measure is subject to an agreement being reached with the airlines to bring in additional passenger numbers. The Minister for Transport, Tourism and Sport is holding discussions in that regard. Furthermore, as with the targeted VAT reductions, a review of this measure will be conducted before the end of 2012 to evaluate its success in bringing in additional passenger numbers. If it is not being successful, the air travel tax will be reapplied. Consequently, the relevant legislation will remain in place to allow the tax to be recommenced if there is no appropriate activity in the market. The cost of this measure, based on a possible implementation date of 1 July 2011 is €15 million in 2011, €90 million in 2012 and €105 million thereafter. The suspension of the air travel tax is one of a number of approaches being taken to revitalise the tourism industry as part of the jobs initiative. Other elements include a new scheme of discounts on airport charges, which has been agreed by the State airports in consultation with the Minister for Transport, Tourism and Sport and the airlines. A tourism marketing campaign will begin, which will be particularly focused on Ireland's major source markets such as the UK.

In addition to these measures, the Minister for Justice and Equality will announce a major reform measure in the visa application system for entry to Ireland. This initiative will make it easier for overseas visitors, including visitors from crucial emerging markets, to come to Ireland without having to incur the trouble and expense of applying for separate visas once they have already obtained visas for the UK. Essentially, the holders of such visas will not require a separate visa to come to Ireland. I know that as well as presenting business and employment opportunities for the coming season, this measure will provide a great opportunity for tourist service providers to capitalise on the hundreds of thousands of visitors who will travel to the London Olympics next year.

Deputies

Hear, hear.

The notable under-performance of tourism over the past few years highlights the need to improve the sector's cost competitiveness, an objective that the measures I have announced will help to advance. A set of costs that are especially important to tourism and other employment-rich areas of the economy are labour costs. One way to help job creation and improve our labour cost competitiveness is to ease the costs on employers of taking on new employees. Accordingly, and in line with the commitment given in the programme for Government, I am announcing today the halving of the lower rate of PRSI until end-2013 on jobs that pay up to €356 per week. This measure will take effect from 1 July next. Also, 1 July next is the effective date for restoration of the minimum wage to its previous level.

Deputies

Hear, hear.

This will be done through legislation to be introduced by my colleague, the Minister for Social Protection, Deputy Joan Burton. The existing employer job, PRSI, incentive scheme will remain in place until the end of this year so that enterprises and businesses that had planned to take on staff under this scheme in that period may continue to do so.

As set out in the programme for Government, it is the Government's intention to reform the structures for setting wages at sectoral level. The Minister for Enterprise, Jobs and Innovation has recently received the report of the independent review of employment regulation orders and registered employment agreements, which will be published shortly. The report states that the system requires radical overhaul to make it fairer and more responsive to changing economic circumstances and labour market conditions.

The downturn in the economy has had a profound effect on the labour market, with areas such as retail, accommodation and food being among those hardest hit. In this environment, it is necessary to ensure that these structures are flexible and adaptable to changing circumstances and that they reflect the realities of our modern economy. In particular, there are issuesrelating to overtime and premium payments for Sunday working, the number of joint labour committees and the general functioning and supervision of the system. Following publication of the report, the Government is determined to proceed with urgency to substantial reform of the system.

Job creation is central to any economic recovery strategy. That is why labour market policy forms an important part of the programme for Government. Measures to reduce employment costs and to make wage-setting arrangements work more fairly and more responsively are, in turn, essential tools of labour market policy but they will not be sufficient to address the severe labour market problems that we currently face. They must be accompanied by measures that ensure a pathway to appropriate employment, education and training opportunities for people who have become unemployed. At all costs we must avoid the risk that people who are now long-term unemployed will find it difficult to secure meaningful employment again in the open labour market. That is why it is essential to maximise the effectiveness of the substantial resources we provide on activation measures and provide for a more integrated approach and targeting of effort.

Increasing levels of engagement with the unemployed at clear milestones is a key element of our approach to creating pathways to employment for such persons. A re-invigorated national employment action plan, within the architecture of the national employment and entitlements service will underpin this increased level of engagement. The Minister for Social Protection will publish details of the further development and roll-out of the new approach to engagement with those on the live register. The Government's objective will be to ensure the State will engage with unemployed people and advise them on training, education or work placement opportunities that are appropriate to each individual's circumstances.

We will provide an additional 6,000 specific skills training courses targeted at those who have left employment in areas where there are now significant structural employment issues, such as the construction industry. We will also provide an additional 3,000 back to education initiative places which will be targeted at adults with less than the leaving certificate. Some 1,000 additional post-leaving certificate places will be targeted at school leavers and adults returning to education. An additional 5,900 places will be provided under the third level-springboard programme targeted at those who have left employment where there are now significant structural employment issues.

The Government will also establish a new national internship scheme providing 5,000 work experience placements in the private, public and voluntary sectors. This will be a time-limited scheme and will provide work experience placements for interns for a six to nine month period. A weekly allowance of €50 per week on top of the existing social welfare entitlement will be payable for the period of the internship.

Taking all of these measures together, the net result is that there will be some 20,900 places available at an additional cost in 2011 of €11 million. This represents a substantial and meaningful commitment to helping people who have lost their jobs. These measures are, of course, on top of the other initiatives such as the supports for over 1,000 redundant apprentices now being put in place to enable them to complete on-the-job training.

It would appear that the time allocated to the Minister is insufficient. Is it agreed that the time be extended to allow him to finish? Agreed.

Thank you, a Cheann Comhairle. I will be able to slow down now.

A Cheann Comhairle, will the time be extended for other speakers?

Has Deputy McGrath something to announce?

There is no time limit for other speakers.

The Minister should be allowed to proceed. This is an important announcement.

I will move on to initiatives relating to public capital projects. Public capital investment can play an important role, both in promoting employment and in addressing worthwhile, visible and pressing infrastructure needs throughout the country. Despite our current circumstances, we will continue to invest in such worthwhile and necessary projects, with the considerable sum of €4.6 billion being allocated for 2011. Capital investment can stimulate economic activity as well as providing direct employment, with an average of eight to 12 direct jobs being created per €1 million of capital expenditure. Additionally, well-targeted investment in infrastructure can have significantly higher indirect job creation impacts in the medium term. However, an investment programme must strike an appropriate balance between projects the purpose of which is to create new capacity, for example, new roads or new schools, and works whose purpose is to maintain the capacity of existing infrastructure by carrying out necessary repair and maintenance. The comprehensive review of State capital spending to which I have already made reference will help the Government to get this balance right in relation to 2012 and beyond.

In the meantime, I have decided that there is a case for tilting the balance for 2011 in the direction of what are called minor capital works and away from new build projects. This is largely on the grounds that I think more resources than originally provided should be directed towards ensuring that our existing stock of infrastructure does not become degraded. A welcome consequence of this is that there will be some modest boost to employment since minor capital works tend to be more employment intensive than larger projects.

Specifically, there will be further investment in schools, local and regional roads and the national energy retrofitting programme.

The cost of these measures will be met by re-allocations from elsewhere within the capital allocations of the relevant Departments and from some of the proceeds of a new levy, the details of which I will set out shortly.

Delivering and maintaining necessary schools is one of the priorities of Government over the next five years. We will continue to invest heavily in our schools. An educated workforce has been central to our previous economic advances and is an absolute prerequisite for our future economic renewal. This will form part of the capital review which is just commencing and which is due to be completed in the autumn. To this end, a further €30 million will be made available for school works and associated works in 2011. Some €20 million of this will be re-allocated by the Minister for Education and Skills from within his own Department's allocation. An additional €10 million of Exchequer funding will be made available to the Department from the proceeds of the new levy. This will be allocated to immediately ready projects to be delivered by schools and will lead to the commencement of an additional €40 million investment, €30 million of which will be spent this summer on what are locally referred to as the summer schemes for schools. A targeted programme using re-allocated funds will enhance existing schools, address building defects and, most importantly, provide immediate, labour-intensive employment in localities throughout the country.

The Government has also agreed that the Department of Education and Skills will continue to invest in new schools. As a result, the Department will identify and deliver two further public private partnership schools bundles in areas where additional infrastructure is required post-2016. Planning and preparatory work will begin immediately. Details of these measures have been announced by the Minister for Education and Skills.

An extra €60 million will be re-allocated to invest in our regional and local roads to carry out much needed surface restoration and road reconstruction works. This important, remedial work is overdue and the additional money invested will allow local authorities to bring forward important projects to 2012 that had previously been pushed back to 2013. The local and regional roads network is fundamental to supporting economic activity away from the main urban centres and motorways. The existing road network must be maintained to a sufficient standard to ensure that the value of this important capital asset does not depreciate prematurely over the coming years. Indeed, if such work is not undertaken soon, the quality of the roads is likely to deteriorate markedly.

All in all, the re-allocated €60 million will help repair about 800 kilometres of local roads right across the country. In addition to this, a further €15 million will be spent on local sustainable transport projects in both urban and rural areas. These will include cycle lanes, pedestrian routes and park-and-ride facilities. These labour-intensive schemes will have a real local impact both in the provision of direct employment and enhancing the quality of local infrastructure. These two measures will support the creation of a number of additional jobs.

There will also be an additional €19 million in Exchequer funding to the Department of Communications, Energy and Natural Resources, for the national energy retrofitting programme, to be supplemented by €11 million savings from within that Department's existing allocation. This will double the funding for the retrofit home energy efficiency and renewable energy programmes in the second half of this year. Energy efficiency works are more labour intensive than other capital programmes and will therefore support additional jobs, as well as delivering long-term savings to households and to the economy in terms of carbon savings. It should also be pointed out that, under the retrofit programme, each €10 million of Exchequer funding provides leverage for up to €15 million in private sector spending.

The size of Exchequer funding for this measure in future years will be considered in the capital review, to be conducted by the Department of public expenditure and reform. In accordance with the programme for Government commitment, we will prepare alternative measures to ensure more energy efficiency programmes can be funded without further recourse to the Exchequer by the end of 2013, if not sooner. In addition to these initial investment measures, we are committed to a more radical overhaul of the wider Exchequer finance capital programme in line with our changed economic and social needs and are putting in place a parallel, commercially financed NewERA strategic investment programme in key works of the economy. Further announcements in this regard can be expected shortly.

The Government recognises that the small and medium enterprise sector is very important to the economy and that public procurement can be an important source of business for SMEs. The Government will build on existing initiatives to promote greater access to procurement opportunities for SMEs, including through identifying and overcoming barriers to their participation in the procurement process. We will also seek to foster greater SME engagement in developing innovative products and services to meet the needs of public bodies within the framework of EU law, and will explore schemes in other EU countries in this regard.

The Taoiseach recently signalled the Government's willingness to pilot an incentivisation scheme to encourage a broad diaspora to work for Ireland in finding potential foreign investments that result in sustained employment in Ireland. The initiative will be piloted by IDA Ireland and is intended to complement the IDA's initiative to attract more fast-growth emerging companies to Ireland. The focus will be mainly on generating projects from SMEs which are not reached through IDA's marketing and networking structures and ideally have the potential for rapid international growth.

To ensure additionality, the pilot will be structured around projects that would not otherwise have found their way to Ireland. It is intended that private sector partners, who could be from the "for profit" or voluntary sectors, will be selected following open competitive tendering, based on objective criteria such as the ability to deliver appropriate leads; the international reach of the persons involved; the ability and quality of the proposed mechanism to filter leads for real potential; a proposed fee and fee structure; and proposals to encourage the use of the fee income for philanthropic purposes. The details of the scheme will be agreed between the Department of public expenditure and reform and the Department of enterprise, jobs and innovation.

The Minister for public expenditure and reform is announcing tomorrow a relaxation of the numbers ceiling applying to non-Exchequer funded posts in the higher education sector in order to further facilitate the maximum possible employment creation potential of that sector, while also encouraging institutions to seek to diversify their sources of funding away from the Exchequer. It is envisaged that similar type arrangements will also apply to contract posts involved in research activity in non-commercial State agencies.

The various tax reduction and additional expenditure measures which I am announcing today will be funded by way of a temporary levy on funded pension schemes and personal pension plans. I propose that the levy will apply at a rate of 0.6% to the capital value of assets under management in pension funds established in the State. It will apply for a period of four years commencing this year and is intended to raise approximately €470 million in each of those years. The levy will not apply to pension funds established here and providing services and benefits solely to non-resident employers and members. Further details regarding the proposed measures of the levy are set out in the summary of initiative measures.

I am conscious of the concerns of the pensions industry about the impact of a levy in circumstances where the pensions sector, in common with other sectors in our economy and society, is finding the current economic and financial environment very challenging. However, the imposition of the levy is for a relatively short period and its purpose is to improve that environment by providing the means to encourage job creation in areas of our economy most likely to deliver that employment quickly. These pension funds, the vast majority of which are invested in overseas assets, have been the beneficiaries of massive tax relief in recent decades. In our current circumstances, there is sound economic logic to clawing back some of the tax relief on capital invested overseas to finance greater domestic employment in Ireland.

The levy is being confined to pension funds because I believe the alternatives for increases in taxation elsewhere at this time would be more damaging to the economy. I will be glad to consult the pensions industry on the legislative provisions which will give effect to the levy so as to seek to minimise, where possible, any unnecessary difficulties to which this measure may give rise.

The pension levy represents a very significant contribution by the pensions industry and the many individual savers it represents to our commitment to getting the economy moving again. I am aware that the pensions sector is also concerned, given the temporary levy, about the commitment in our agreement with the EU-IMF to reduce the tax relief on pension contributions starting next year. I will examine this issue in the context of the results of the comprehensive review of expenditure currently being undertaken by the Minister for public expenditure and reform, and any resulting scope for fiscally neutral changes to the EU-IMF agreement.

At the end of March, a range of measures was announced to reorganise, recapitalise and de-leverage the domestic financial system in order to restore the banks to health and continue to provide a secure banking system for deposits. The three main elements of this strategy — recapitalisation, strong liquidity standards and a radical reorganisation and downsizing of the banking sector with the establishment of two pillar, full-service banks — are fundamental to economic recovery and job creation. The restructuring of the banking system will result in banks that are more proportionate to the size of the economy, that can better serve business and households and provide the vital supply of credit needed to support industry and consumers.

The banking system must provide substantial new lending into the economy. The business plans submitted by the pillar banks provide for over €30 billion of total new lending over the next three years across their core business areas. Up to €20 billion of this figure will go to small and medium size businesses, which are the lifeblood of economic recovery. The authorities will be rigorously monitoring the banks' activities to ensure credit is available for borrowers meeting reasonable credit standard requirements.

The plans to restructure and recapitalise the banking system represent the principal response to the challenge of ensuring the availability of credit to viable businesses. These plans are designed to secure an adequate flow of credit into the economy to support economic recovery, even as the banking system is downsized. Notwithstanding this, there remains an issue which predates the recent banking crisis, whereby new companies or expanding companies trying to develop new products or markets struggle to secure finance. This can be due to a lack of familiarity or understanding of the new industry, the new product or the potential of new markets. This market failure in the provision of credit to viable businesses became particularly acute in Ireland during the property bubble, during which time the Irish banks lost the capacity to assess credit risk in companies that were unable to offer property-related collateral.

This is why my Department will work with the Department of enterprise, jobs and innovation over the coming weeks to flesh out the lending targets of the two pillar banks agreed as part of the restructuring plans and to develop a package of additional, targeted initiatives designed to address specific market failures in the provision of credit for viable businesses. These measures will, of course, be subject to EU state aid approval, where necessary.

Among the issues that will be examined will be the role of the Credit Review Office, the credit assessment procedures and skills of the two pillar banks, the reporting procedures of the banks regarding new lending and what the Government can do to support the continued operation in Ireland of foreign-owned banks. As part of this package of initiatives, and in accordance with the commitment in the programme for Government, we will also be initiating a tendering process for the development of a temporary, partial credit guarantee scheme.

The design of the scheme will draw from international experience to support new lending that would not otherwise have been extended by the banks. In this way, the scheme will complement, rather than be a substitute for, existing lending activities by the main financial institutions. It will be designed to encourage banks to lend to new or expanding commercially viable SMEs so they can grow their company, develop new products or expand into new markets.

The Government's commitment will be for an initial period of one year. Specific performance criteria will be set down that allow for review and revision of the scheme at the end of that initial period before committing to a roll-over of the scheme for subsequent years. There will be a modest and known level of exposure to the taxpayer when the scheme is launched but I expect to see a significant positive knock-on benefit to the economy in terms of job creation, welfare savings and returns to the Exchequer by way of tax revenue generated. The Minister for Enterprise, Jobs and Innovation, Deputy Richard Bruton, and I will develop this proposal further with our officials. It is our intention to announce the details of the scheme in June, with a view to having a targeted scheme in place by the autumn.

In line with the commitment in the programme for Government, a microfinance start-up fund to provide loans to small businesses is being developed. A workable scheme and optimum delivery mechanisms are now being considered and this work will be brought to fruition for the December budget.

There is no escaping the fact that we do not have the resources available at present to fund large-scale policy initiatives to help to generate economic activity. Given the weak state of the public finances, the costs associated with the measures we are implementing as part of this jobs initiative must be paid for through the introduction of off-setting measures. In practice, this means the initiative must be budget-neutral over the period to 2014. That in turn means the direct stimulatory effect of today's package of initiatives will be modest and there will be no extravagant claims made in its regard from this side of the House.

However, the measures announced principally represent the first steps by this Government towards improving the competitiveness of important sectors of the economy and enhancing the functioning of our labour market to better facilitate the return to work of those who are currently unemployed. These first steps will be followed by further movement towards this Government's vision of rebuilding a prosperous and productive economy by the end of our term in office. In addition, I believe today's jobs initiative will help to rebuild confidence among households and firms at home and amongst potential investors abroad. In the first instance, as an initiative it points to a Government which is alive to the fact that, despite the tight constraints within which economic policy must now be pursued, it is still possible to make policy changes for the better. The Government is prepared to initiate those changes. Second, I believe the jobs initiative will help to rebuild confidence because it points to a Government which has a vision of what it wants to achieve, a strategy for getting there and the energy and decisiveness needed to adopt the measures required.

I believe the House will agree that in the early days of its tenure, this Government has not been found wanting. We identified priorities for action in our programme for Government and are well on the way to delivering on each of these although barely two months in office.

I commend the jobs initiative to the House.

Deputies

Hear, hear.

Where are the jobs?

I call the spokesperson from Fianna Fáil.

I welcome Deputy Higgins to the Government benches. He has joined this side.

(Interruptions).

I ask for order, please.

A Deputy

Come on over here, Joe

They are not here, that is for sure.

You gave away your job in Brussels, Joe.

I ask Deputies to show some respect for the spokesperson for Fianna Fáil. Can we have some order in the House? I thank Deputies, when they are ready.

I ask to share time with Deputy Sean Fleming.

I welcome the opportunity to comment on this, the Government's first initiative in the field of job creation. Welcome though it may be, however — and I welcome it — it is rather minimalist. When one compares it to the documents produced by Fine Gael less than 12 months ago which promised €18 billion expenditure on job creation, it pales into insignificance. For every €36 promised in that original and widely circulated document €1 is being spent today. Of course, when reality kicked in the figure of €18 billion dropped, first to €7 billion. Now it has dwindled to €500 million.

None the less, the unemployment problem in this country is very severe. I recognise this, as does my party, and I welcome any initiative, from whatever Government, that will attempt to deal with that situation. I intend, therefore, to be as positive and constructive as I can. I have a number of questions which I hope are legitimate, a number of criticisms I hope the Minister will regard as constructive and a number of suggestions I hope he will regard as helpful.

Let the Deputy include in his contribution an apology for destroying the economy.

In regard to the Minister's announcement on employers' PRSI, I had been somewhat confused as to how exactly this would operate, arising from certain statements made by the Minister and some of his colleagues. However, it is made reasonably clear in today's statement, which I welcome. It would appear that in respect of jobs which generate up to €356 per week income an employer who creates such a job will have his or her employer's PRSI halved, from 8.5% to 4.5%. The Minister must recognise there is a danger in this situation. What about the case of a person earning, for example, €370, €365 or €360 per week? In such a case will there not be an incentive for an employer to reduce wages to avail of the new rate of PSRI? I do not know how the measure will operate — we will tease it out when the Minister answers questions on Thursday, as I am glad to see he will do. Neither do I know if there is to be a kind of tapering, or marginal, relief that may be worked up gradually from the figure of €356. This must be done very carefully otherwise the cure is in danger of being worse than the disease.

The Minister announced a very important change in regard to the tax treatment of research and development expenditure which I warmly welcome. Leaving aside terminology in respect of above and below the line, in effect this means that in order to encourage people to invest in research and development this State will provide tax incentives or credits. As a result of this change, people who now provide such investment will, in almost every case, be able to claim full credit for the investment they provide. That is a very substantial step forward. We must remember there is very substantial tax competition at present in regard to the tax treatment of intellectual property. Other countries have taken various initiatives in this regard. The success of this country has been phenomenal if one considers the figures for recent years as released by the relevant agencies. Ireland has been phenomenally successful in attracting this type of investment which is absolutely vital for the future health of its economy. This is a very worthwhile initiative.

If I may presume on the Minister's obvious interest in this area there are some other aspects of this issue I wish to mention. There is a difficulty with the way such tax treatment is currently calculated, in terms of a base year of 2003 and expenditure over the amount spent in the base year. That has created a number of difficulties for what I imagine to be a relatively small number of firms which spent a great deal of money on research and development in 2003 and have been spending similarly since then. Perhaps a small adjustment, if not in the forthcoming budget perhaps in that of December, would yield very desirable results in that regard.

Another point I wish to make to the Minister in the context of tax relief on research and development concerns the outreach cap. As I understand it, at present an enterprise is allowed to outsource only 5% of its expenditure on research and development to a research institute. It is time to raise that cap substantially. One impact is to prevent linkage between the work done in this regard by research institutes and the work done by business. The Government has taken over many other policies designed to encourage linkage from the previous Government and has announced them in the programme for Government. Basically, maintaining the cap in place runs directly counter to many of the Government proposals with which I agree.

Will the Minister explain what became of the promise in the programme for Government to allow businesses that spend up to €100,000 on research and development to pay the full amount with no reference to the base year? This commitment was written into the programme for Government but I do not see it in the document today and I am bringing it to the Minister's attention.

Small and medium-sized enterprises are the lifeblood of the economy. I welcome the many references to SMEs in the programme for Government. Although there is some provision for them in the document, it is rather scanty. It relates to public procurement and is rather vague. There is no doubt that there is great capacity for SMEs to improve their business through public procurement but I state without fear of contradiction that the efforts made to date to improve the SME share of public procurement business have been an abysmal failure. For example, the first thing they run up against is the requirement for financial records and history. Many SMEs do not go back to the year dot or do not have 50 years of audited accounts, etc. There is too much emphasis on the financial history of the applicant for public procurement jobs and less on the capacity of the applicant to do the job.

Another problem is the famous Department of Finance circular 10/10, which was supposed to facilitate SMEs to access public procurement business. The circular has been honoured more in the breach than the observance. It was supposed to deal with such matters as transparency regarding opportunities which would arise, the capacity of companies or SMEs to break the contract into job lots, the capacity of SMEs to get together and make a joint application, information about indemnity and insurance etc. However, this is not happening. I put it to the Minister there is a need to urgently review this circular with a view to clarifying many aspects of it and to ensure that it is properly enforced.

A section of the document deals with labour market activation. I thought it looked somewhat familiar and now I remember that I saw it in the last budget and in the four-year plan. The measures seem to build on those. I recall the Minister for Enterprise, Trade and Innovation, Deputy Bruton, stating in Opposition that we had to consider scale with regard to these matters. He appears to be considering scale now, albeit a slightly increased scale. There are two difficulties in this regard. First, we must think bigger. If the present rate of unemployment is maintained — hopefully it will not increase — we must consider the scale of it. When he was in Opposition, Deputy Bruton rightly stated — I fully agreed with him at the time — that these measures could be cost-effective regardless of scale.

Second, the present system is unwieldy to say the least. It appears the Government is grafting on these new places to the present system. I realise the introduction of the one-stop-shop, which I welcome, will considerably alleviate the situation in this regard. Recently, I put a question to the Minister for Social Protection in respect of when exactly the one-stop-shop will come into operation. I was not overly enthused by the reply I received because it appears to be years away. What will happen in the meantime? We could do with some streamlining.

I wish to put forward several ideas with regard to labour activation. First, there should be a specific unit in one Department, with access to its website, to monitor the implementation of these schemes to ensure that we are getting value for money and that the schemes are working correctly. Second, apparently there is a problem with branding. I am informed employers do not relate well to opportunities with a social content. This is not rocket science, it is a question of re-branding. We could call it upskilling or further training for the new economy or whatever.

I welcome the Minister's announcement of the top-up payment of €50 per week on social welfare. However, in the vast majority of cases of which I am aware it will not work because the difficulty is that we are dealing with interns or graduates being taken on for work placement in industry or business for a given period. Most of these will be living at home and because of social welfare rules in this country they will be entitled to very little or perhaps no social welfare. In the meantime, the employer is prevented from paying them any money. The €50 initiative announced today is welcome in so far as it goes but I do not believe it goes nearly far enough. I urge the Minister to consider the question of giving legal status to interns. If internship is to be a feature of what we are doing in terms of labour activation then they deserve some legal status at least.

With regard to VAT changes, the original suggestion in the programme for Government was that the 13.5% rate would be reduced to 12%. The Minister has introduced a more focused scheme today and it represents the lion's share of the spending the Government has undertaken in this initiative, some €350 million in a full year. The perennial problem is whether the decrease will be passed on. I have no hesitation in admitting that enforcement in this country is fairly patchy. I am unsure what the Minister has in mind to ensure this is passed on so that consumers may properly avail of it.

A considerable range of labour intensive areas which are VAT rated at 13.5% have been excluded. The Minister is focusing the measure, which is fair enough. However, when one focuses a measure in one direction, one leaves out a whole range of other areas. Will the carpenters, electricians or plumbers be covered? I note the change covers meals in restaurants and theatre tickets, etc. Therefore, as a result of the initiative, the Government will ensure that someone who is having a meal out will pay less but the 13.5% rate still applies to the ESB and electricity charges suffered and incurred by people living in fuel poverty. There is no provision for them. Also, I note hairdressing is included. Yesterday, I passed a barber shop in Limerick that offered haircuts for €20.

The Deputy should have gone in.

The Deputy saw the Minister in time.

The deal was for €20 inclusive of VAT.

I have no vested interest in it.

(Interruptions).

Now, I will be able to avail of the service for €19, provided I get my hair cut before the end of 2013.

There is no guarantee of that.

The difficulty is whether this would create jobs. What is the linkage between this considerable expenditure from the Government, which is in straitened circumstances — that much we all accept — and job creation? Would the money not have been better spent on sectoral, targeted areas to create employment? I believe it would have been but there is no guarantee of it at present. The Minister will recall the efforts of the previousLabour Party Government in the United Kingdom which invested a vast amount of taxforgone on substantial reductions in VAT. It did not receive the concomitant responsefrom the jobs market or from revenue yield and that Government finished up worse off than it started.

The method of funding leaves me bemused. Today, I heard the well-known authority, Eddie Hobbs, on the radio describing it as "theft Tuesday". He said it was bizarre. Basically, the position is that this country has an ageing population. The number of people over the age of 65 years is growing remarkably and it will have trebled during the course of this century. As there is absolutely no way the State can provide for these people, we must try to encourage them to provide for themselves. I recall Fine Gael spokesmen before the general election referring to the proposal included in the four year plan to reduce the payment of tax relief on pension contributions from the top rate to the standard rate of 20%. The word was that they had a better way and a much less painful way of dealing with the matter, by introducing a levy such as this. What are they now doing? They are doing both. When we take the double whammy of the sum of €900 million a year in the EU-IMF agreement and this levy, taking into account the cost of annuities and poor returns, I do not know how many will take out private pension plans from now on. The cost will fall back on taxpayers.

There is no doubt that 80% to 90% of private pension schemes are insolvent. This is, basically, a levy on funds held by insolvent organisations, the liabilities of which exceed their assets. It will mean — the Government is legislating to enable this to happen — that those participating in defined benefit schemes, elderly people, those living in very poor circumstances and on fixed incomes because indexation had to be got rid of owing to the collapse in the markets will see their pensions being reduced as a result. Many pension schemes, because they will be unable to meet the minimum funding requirements, will be forced to wind up. The losses crystallised at that point will fall on those who have contributed; they will receive no pensions and only get back only a fraction of what they have put in. It is very unfair.

Towards the end of his contribution the Minister mentioned there had been massive tax relief for pension contributions. That is true, to encourage people to provide for themselves, but tax relief was also available to public sector workers, as well as to those in the private sector. This arrangement is confined exclusively, apparently, to the private sector. If this is compensation for the tax relief given in the past, it should be spread equally across the board.

We have a practice whereby we tax economic activity arising from deposits which yield interest payments that we then tax. People save for pensions and we tax payments from these funds. However, this is the first time in history the capital is being targeted. Pensioners' savings are on a par with deposits. A line has been crossed. Does this mean the Government feels free, with its huge majority if it gives itself the power, to target savings? The principle is the same. Some of those who will suffer reduced pensions as a direct result of this measure are those who have lost their jobs and are relying on their reduced pensions. It is hardly fair. This is the biggest smash and grab raid since Nero got rid of half of Rome to build a pad for himself.

There are alternatives as pointed out by the pensions body which wrote to the Minister. He says he wants to meet it now; it is a shame he did not meet it before now. There are innovative alternatives that could give the Government access to the €72 billion in pension funds to create jobs in the economy, especially when credit is in such short supply. We are suffering a 14.5% unemployment rate. Behind the cold official statistics there is human misery, desolation and despair. I welcome any attempt by any Government of any hue to deal with that issue, but this is not even, to use Churchill's phrase, the end of the beginning. The Government is barely scratching the surface. There was once an election slogan, "A lot done, a lot more to do". The slogan tonight could be, "Very, very little done, an awful lot to do".

I welcome the opportunity to speak on this important day for the 440,000 on the live register, 170,000 of whom are long-term unemployed. To be added to these figures are the many graduates and school leavers who will enter the jobs market later this year. All these people, well over 500,000, pinned their hopes on this announcement today. From that point of view, one will appreciate there is a level of good will for the Government in taking this initiative, as people hope to see some improvement in their employment prospects, with the possibility of long-term unemployed persons, graduates and school leavers finding jobs. Sadly, I am disappointed to say, I do not see that happening, although I would like to be more positive, as I came here on a positive note. Most people will be positive when they tune into the news. However, when they look at the small print, they will ask, "Where is the beef? Where are the jobs?"

The Minister says he is funding this measure with the pension levy, the 6% levy on the market value of pensions on 1 January 2011. People will see the nest egg they have built up during the years being raided. During the recent general election both Fine Gael and the Labour Party promised to increase the tax payable on interest on money people had saved on deposit in their banks. The Government is now committed to taxing the interest payable on bank accounts and raiding pension funds. People will be rightly concerned that perhaps it might raid their deposit accounts next. The Government must allay that fear; it must tell the people they need not worry that deposit accounts will be touched during its lifetime.

Most of these measures will be enacted by legislation by 1 July. I am concerned that the pension levy has been backdated to 1 January. This is a phenomenal shock. All pension funds made their plans and calculations for budgets and dividends on what they could afford towards the end of last year. On page 20 of the Government's own document it is stated the yield this year will be €470 million. That will also be the yield next year and the year after. It is a retrospective levy for the full year, even though it will only be taken in the second half of the year. People will be shocked that there is to be a levy, that it is so severe and being backdated for six months. That will be a further bone of contention for many.

There is a figure of €390 million in the capital programme for schools. The Minister says he will move a figure of €20 million from this to the summer works scheme and that an extra €10 million will be provided by way of the pension levy. Normally the capital fund creates eight to 12 jobs for every €1 million spent. We will assume there will be a doubling of that figure in the case of the summer works scheme, but even if 20 jobs are created per annum for each €1 million spent, it will amount to only 200 extra jobs. These 200 jobs in the construction industry will be welcomed and appreciated and we will support their creation, but in the context of the scale of the problem, the single greatest initiative will, at a maximum and on a very optimistic basis, provide for the creation of only 200 jobs in a full year.

People will be disappointed at the small number of jobs which will flow from today's announcement. Overall, I am shocked by this announcement. The Minister states that the pension levy will raise €470 million. I welcome the reduction in other taxes such as a reduction in excise tax by €15 million and VAT by €120 million, PRSI by €85 million and by €9 million and the Minister proposes to reduce other income taxes by €230 million. This means he will have €240 million available for job creation.

I refer to current expenditure measures proposed on page 22 of the Minister's statement:

Total additional current expenditure to specified areas will amount to €29 million in 2011 or €45 million in a full year. These will be funded by reallocations of €18 million from within existing current resources and €11 million from the introduction of the levy on pension funds in 2011.

The Minister is providing €11 million out of the pension levy for current expenditure job creation, which means the labour activation projects. The Minister proposes that total additional capital expenditure will amount to €135 million, funded by reallocations of €106 million from within existing resources and only €29 million will be produced from the introduction of the levy on pension funds. The capital expenditure fund will receive €29 million from the pension levy and €11 million from the pension levy will go to current expenditure, giving a total of €40 million from the pension levy. A total of €240 million will come from the pension levy, meaning that the pension levy is being raided today to the tune of €470 million, with €40 million of it going into capital and current job creation measures. The Minister states that his figures will produce a surplus from the pension levy of €200 million which he will use to reduce the deficit. This is a raid on the pension fund to cut the budget deficit by €200 million, with a few scraps of €40 million given to job creation and a reallocation of a couple of hundred million. There is no sign in the Minister's document of the vast bulk of the pension levy being spent on job creation.

I remind the Minister of the old cliché that one should not judge a book by its cover. This is very true with regard to this document. The title cover reads "Jobs Initiative May 2011". However, one can judge this book by what is written on the final page where it states that according to the quarterly national household survey the unemployment rate at the end of 2010 — just a few weeks before this Government came into office — was 13.6%. The Minister's document forecasts that the unemployment rate at the end of 2012 will be 13.7%. The Minister is predicting an increase in the unemployment rate over the first two years in office of this Government. Some people may be fooled by a book cover but people cannot be fooled all the time. They will see that most of the pension levy is being used to cushion the budget deficit. In the final paragraph the Minister predicts an increase in unemployment in the period from last year to the end of next year. People will be very disappointed when they read the details of the initiative.

The Minister states that he will reduce the deficit to 3% of GDP by 2015. This will mean extra borrowing and extra interest rates to be paid for an additional year. I ask the Minister to outline the resulting extra cost to the Exchequer of funding the jobs initiative.

Listening to the Minister's speech I now fully understand why the Government downgraded today's announcement from being a jobs budget to a jobs fund to a jobs initiative and the reason is crystal clear. It gives me no pleasure to say that across the country, hundreds of thousands of people will be deeply disappointed by today's jobs initiative. There are 439,571 reasons the Minister and his Government colleagues should have done better and done more.

The election, held a few weeks ago and which brought this Government into office, was all about jobs. However, one must question how many jobs are being promised in this initiative and how many people will be taken off the live register. How many of the 439,571 people can look to a future of employment as a result of this major announcement from the Government? The capital projects such as retrofitting, schools maintenance works, investment in local and regional roads, the smarter travel project, will benefit by an additional €29 million. The Minister estimates that this investment will create jobs per million euro. I congratulate the Minister because this proposal for the total allocation for capital projects will create 348 jobs this year. I do not know if this is what he expected but people will be desperately disappointed at these announcements and hope has been snatched from them.

There is no doubt that the Government has entered into office when the country is in an economic mess left by the previous Administration. Despite projections to the contrary, almost all the economic indicators show that the policies of austerity implemented by Fianna Fáil and the Green Party since the 2008 budget continue to drive our economy into the ground. We all know that GDP continues to decline, by 0.7% for the last quarter in 2010 and unemployment continues to rise at 439,571 in April, up 1.6% since April 2010. Inflation and interest rates are steadily rising, creating additional pressures on businesses and families struggling to cope with lower wages, fewer working hours and depressed consumer demand. All the while, despite being told there is no money for investment in job creation, public service provision or adequate social welfare, the previous Government was willing to borrow billions of euros to prop up a banking system with no evident social or economic dividend for the ordinary citizen.

As a result of three long years of bank bailouts, savage cuts and increasing unemployment, it is no wonder that the Government deficit continues to rise. At the end of the first quarter of 2011, the Government deficit now stands at €9.9 billion, which is €3 billion up on the same period in 2010, thanks to a further injection of €3 billion into Anglo Irish Bank. According to the OECD, Irish debt as a percentage of GDP, continues to rise. It is projected to hit 113% at the end of 2011, up from 105% last year. The European Commission estimates that our debt to GDP ratio will reach 120% by 2014, which would bring the total debt to €190 billion. This is not new because Sinn Féin in this Dáil and previously said this was the direction and the trajectory which the State as taking under the austerity measures. Only last week, the UCD economist, Mr. Morgan Kelly, argued that when liabilities and expenditure from bank recapitalisation and NAMA are taken into account, the State will have a total debt of €250 billion in 2010, amounting to an incredible €120,000 debt per person per year.

Our society and our economy are in the middle of a perfect storm, comprising three linked crises, a jobs crisis, a debt crisis and a deficit crisis. The outgoing Government believed that the best way to exit this perfect storm was to ignore the need to create jobs, to borrow billions to bail out the banks and heap the burden of the recession on low and middle income families with wage cuts and tax increases. This approach is simply not working. Those who do not think the figures speak for themselves should go out on to the streets and talk to people who are struggling. I refer, for example, to families that are finding it difficult to pay their bills, businesses that are finding it difficult to secure credit lines and unemployed people who are finding it difficult to get work. Our society and our economy are on their knees. People are looking to the Government to devise and implement solutions to our jobs, debt and deficit crises.

I remind the House of what Fine Gael and the Labour Party said during the election campaign. They told the electorate that if they were elected, job creation would be the priority of the new Government. Deputy Kenny had a five point plan to get Ireland back to work. It is clear that it is now a five point U-turn. He told us that the protection and creation of jobs was his priority. Deputy Gilmore's jobs strategy involved the establishment of a strategic investment bank and was aimed at creating jobs and getting credit flowing to businesses again. Fine Gael was not embarrassed to say it would create 100,000 jobs over five years through the NewERA programme. It told voters it would invest €7 billion in the development of the State's water services, telecommunications, infrastructure and energy industries. I remind Deputies that Fine Gael said it would invest €7 billion in such capital projects. The investment in such projects that has been announced today amounts to an additional €29 million and will create 232 jobs. Fine Gael also promised that 45,000 new employment and training places would be created to target youth unemployment. Some 23,000 of these places were to comprise a national internship programme and 17,000 were to be second chance education places. It also proposed that 700 new places for apprentices and 5,000 new community employment places would be made available. The scale of Fine Gael's job creation, training and education proposals was ambitious, even if the costings were a little fuzzy.

The Labour Party promised before the election that it would put in place a €500 million jobs fund to support new ideas and create employment in strategic sectors of the economy. It also promised to establish a strategic investment bank, with a lending capacity of €2 billion, from the National Pension Reserve Fund. Like Fine Gael, the Labour Party outlined a series of training, education and work placement schemes. It promised to provide 60,000 places during the lifetime of the Government — 30,000 in work experience places for graduates and 30,000 in training and education places for the unemployed. If we were to believe the pre-election promises of Fine Gael and the Labour Party, some 100,000 jobs and 60,000 training places were to be funded to the tune of between €2.5 billion and €7 billion. These commitments were used to win votes, to get the former Opposition Deputies into the positions they are in today and, ultimately, to form the new Administration.

The speed with which Fine Gael and the Labour Party have abandoned their promises is truly breathtaking. Within two weeks of the election, they agreed a programme for Government that contained no figures or targets for job creation in its 64 pages. The strategic investment bank and the NewERA proposals survived the negotiations, but the proposed investment of between €2.5 billion and €7 billion did not. The programme for Government sets out a target number of education, training and work placement programmes, but it is half the figure promised by Fine Gael and the Labour Party during the election campaign. The number of places proposed dropped from 60,000 to just 15,000. Just 20,000 places have been announced today. If ever there was an example of political parties breaking election promises as soon as they got into office, this is it. During the election campaign, the Labour Party promised a jobs strategy and Fine Gael promised a jobs budget. In the programme for Government, these weighty commitments were downgraded to a "jobs fund". This weaker proposal has now been diluted further and is now a revenue-neutral jobs initiative. The spending commitments are gone and the job targets and training places have been slashed.

Before the Minister for Finance and his Fine Gael and Labour Party colleagues came to the House today, it was clear to Deputies on this side of the House and people in the wider community that we would get very little. The Government had been playing down the initiative and rightly so because very little was to be presented. Today's announcement needs to be read in conjunction with the savage austerity measures that have been proposed by the Government under the EU-IMF programme. The measures outlined during last week's debate will further depress consumer spending and lead to higher levels of unemployment in the public and private sectors. There is no two ways about it — the measures in the austerity programme, such as the introduction of water rates and property taxes and the reduction in tax credits and tax bands, will depress consumer spending and lead to more people becoming unemployed in the domestic economy.

Some aspects of today's initiative are undoubtedly to be welcomed. When the proposals that have been outlined by the Minister, Deputy Noonan, are taken together, it is clear not only that they will fail to create substantial employment, but that some of them will depress consumer spending and lead to a rise in unemployment. Sinn Féin is on record as welcoming the reversal of the cut in the minimum wage. This is especially welcome for the thousands of workers who lost a significant portion of their income when Fianna Fáil introduced the cut last year. The positive benefit of this measure for the economy is dramatically undermined by the Government's assertion — repeated again today — that it intends to attack the wages of up to 300,000 low-paid workers across the State under the guise of a review of joint labour committees. Any reduction in the income of this section of the workforce will have a devastating impact on thousands of small and medium sized local businesses that depend on the spending power of lower income earners to survive. This will be compounded by the cuts to social welfare being proposed under the guise of removing so-called disincentives to work in the social welfare system. These cuts will further reduce the spending power of the increasing number of people who receive social welfare payments and, in turn, further damage our local retail and service sectors.

The employers' PRSI initiative was a targeted jobs scheme. It meant that those who employed someone who had been undertaking a FÁS training programme or had been unemployed for six months did not have to pay PRSI for 12 months. It was specifically targeted at new employment. It was not available to the existing employees of employers. Although the scheme will continue until the end of this year, it is disappointing that the Minister for Finance failed to announce today that it will continue thereafter. Instead, the Minister announced that he intends to reduce the rate of employers' PRSI from 8.5% to 4.25%. Sinn Féin is concerned that the reduction to 4.25% in the rate of PRSI applying to jobs for which employees are paid up to €356 per week will incentivise employers to decrease the pay of those who currently earn more than this amount, or engage in firing and rehiring to achieve the same end. I ask the Minister to keep a close eye on the practices of those who avail of this incentive. The existence of two rates — 4.25% and 10.75% — will offer employers a major financial incentive to reduce the pay of employees in order to avail of the lower rate. That was not the case in the past because the rates were closer together.

The elements of the initiative that I have mentioned, such as the review of joint labour committees, have nothing to do with job creation. They involve trying to suppress the cost of labour in a vain attempt to increase economic competitiveness. The employees who will be most affected by these wage cuts work in the domestic rather than the export sector, which demonstrates that this is simply a cost-cutting initiative that will drive down wages, increase poverty and lead to further job losses. Any new programmes or expansions of existing schemes that are aimed at improving people's employment are to be welcomed. I have said that some of the Minister's proposals are welcome. Sinn Féin will study in detail the proposal, as outlined today, to provide 20,900 new places under various training schemes. My colleague, Deputy Crowe, will elaborate on that when he addresses the House during this debate on Thursday. The 20,900 new places are a far cry from the 60,000 places promised several weeks ago. That the total additional expenditure in this area is a meagre €29 million speaks for itself. Increased investment in labour activation measures is only worthwhile if there are meaningful jobs on the other side of it. The Government has not properly addressed the issue and is not prepared to stimulate the economy. There is deep fear that we are about to see a repeat of what took place in the 1980s and that people will be trained for a future of social welfare or emigration.

The substance of today's jobs initiative deals with issues of labour market costs and activation. The questions many people will ask are, "Where are the jobs?" and "How many jobs will the initiative create?" As with the programme for Government, the jobs initiative does not contain job creation targets. The Government proposes to spend a total of €135 million on capital projects in the coming year. Of this figure, €106 million is from existing capital allocations. This means only €29 million of additional expenditure will be allocated in this area in 2011. According to the Government's figures, slightly more than 200 jobs will be created as a result. Considering the level of immediate job growth that could be delivered in this area and the funds at the Government's disposal, its unwillingness to significantly increase investment in labour intensive capital projects constitutes a complete failure. As for the much promised measures to assist small and medium sized enterprise to access credit, the Minister's proposals do not provide detail.

The Minister has argued that the Government's hands are tied, the jobs initiative must be financially neutral and an alternative is not available. There is always an alternative. We elect Governments to bring forward proposals and, as my colleagues have noted, stand up for Irish interests. Sinn Féin has put forward alternatives. My party has long argued that the Government can neither cut nor borrow its way out of the jobs, debt and deficit crises. While we need to reduce the deficit and debt to GDP ratio and require a strategy to allow the State to return to the international bond markets to resume normal lending, none of these objectives can be achieved through the economics of austerity. We have had four austerity budgets since 2008 and each time unemployment, debt and deficit levels have increased. Austerity is not only incapable of fixing these problems, it makes them worse. The only way to exit the perfect storm of the jobs, debt and deficit crisis is to invest in job creation. The only way to get the economy back on track is to invest in a major stimulus package aimed at saving and creating jobs, assisting small and medium sized businesses, helping hard pressed families and boosting consumer spending.

If Sinn Féin were in government, we would invest €2.9 billion over the next 12 months to stimulate economic activity, job creation and consumer spending. Not only is such an approach affordable, it is urgently needed if we are to break the downward spiral created by the Fianna Fail Party policies of austerity which are being followed by Fine Gael and the Labour Party. Most of us know that there is €14.7 billion left in the National Pensions Reserve Fund, of which €10 billion has been committed by Fianna Fáil, Fine Gael and the Labour Party for future bank bailouts under the terms of the EU-ECB-IMF austerity programme. Sinn Féin in government would use €2 billion of the remaining €4.7 billion over the next 12 months to fund a job creation and retention programme. Combined with a €900 million package aimed at boosting consumer spending, it would be possible to protect and create in excess of 75,000 jobs.

Sinn Féin would spend €1 billion of the €4.7 billion on fast-tracking labour intensive infrastructure projects, including schools and hospitals building projects, upgrading water infrastructure, developing public transport networks and rolling out State-wide broadband services. According to the Department of Finance, every €1 billion invested in capital infrastructure projects generates more than €4 billion in GDP over time, which would amount to an increase of GDP in the order of 3.2%.

Sinn Féin would use a further €600 million for a specific job creation and retention fund which would subsidise small and medium sized enterprises to retain existing staff and, where possible, take on additional staff. This proposal is similar to the successful model developed by the German Government. We would invest €400 million in the State child care and pre-education sector with the objective of building a public child care service, creating jobs and incentivising parents to return to employment by providing child care at an affordable price. Studies have shown that for every €4 invested in child care, €7 is returned to the Exchequer in increased workforce participation.

In light of the fact that 50,000 young people are due to emigrate in the coming 12 months, we would ring-fence €500 million of the spend in each of the three areas I have cited to specifically target employment opportunities for young people, ensuring that at least 20,000 of the 75,000 jobs would go to those under the age of 25 years.

In addition to this €2 billion job creation and protection fund from the National Pensions Reserve Fund, Sinn Féin in government would inject a further €900 million into the economy in the form of a family stimulus package funded through additional tax revenue and the abolition of the universal social charge. The aim of this package of measures would be to reverse some of the heavy burden placed on working families and those on social welfare by the previous Government and, in so doing, boost consumer spending. Our family stimulus package would be funded through a portion of a new 1% wealth tax that we would introduce on net assets of more than €1 million. We estimate this proposal would generate an additional €1 billion in a full calendar year. The package would include €140 million investment in refundable tax credits for 113,000 of the lowest income earners, which would benefit 240,000 people in total.

We would also restore the Christmas bonus and thereby put €225 million into the pockets of the State's poorest families and, in turn, local economies across the country. We would boost employment and consumer demand through an additional €50 million per annum investment in frontline community sector employment and an €85 million investment in easing the recruitment embargo in frontline public services such as education, health, the Garda and social welfare.

In addition to this family stimulus package, Sinn Féin would immediately abolish the universal social charge, thereby releasing a further €400 million of spending power into the local economy. We would replace the revenue lost to the State under this measure by introducing a third rate of income tax of 48% on individual incomes over €100,000 per annum.

Combined, the measures proposed by Sinn Féin amount to an investment of €2.9 billion in saving and creating jobs and boosting consumer spending. Alongside this package, we would introduce a range of measures to assist small and medium sized enterprises, the full detail of which my colleague, Deputy Peadar Tóibín, will outline when he addresses the House tomorrow afternoon.

The policies of austerity implemented by the Fianna Fáil Party and now supported by Fine Gael and the Labour Party are not working. The approach outlined by the Government today, written under the watchful eye of the European Commission, European Central Bank and International Monetary Fund, will continue to push our economy and society further into the cycle of unemployment, debt and deficit. It is ironic that for the past six weeks the Government has bored us with the mantra that its jobs budget must be revenue neutral and its hands are tied as a result of the economic circumstances when, only a few weeks ago, it committed to inject €24 billion of taxpayers' money into failed banks. Even last week, it repeated that, subject to the stress tests in Anglo Irish Bank which are due in the next couple of weeks, it will commit further billions of euro, in addition to the €30 billion it has already committed, to this failed bank.

Many people are asking why it is not possible to have a revenue neutral banking policy when we must have a revenue neutral jobs budget. Such an approach would make a major contribution to solving the problem we face. The Government appears to believe it is fine to take a revenue neutral approach to its number one priority of getting 437,000 into work while investing not millions but billions of euros of our money in failed toxic banks which will never pay a dividend for the economy or to citizens. There are alternatives that can break this cycle, based on investment in jobs and boosting consumer demand. The economy is crying out for stimulus and ordinary people are crying out for a change of direction. Sinn Féin today laid out proposals for a €2.9 billion investment in our society and economy, which is the only credible and costed alternative to the failed policies of austerity that were introduced by Fianna Fáil and unfortunately, despite all the pre-election rhetoric, now are being supported Fine Gael and Labour.

What was presented in the Chamber today will be revenue neutral but unfortunately also will be jobs neutral. There is a better and different way and Sinn Féin has led the charge in this regard. While some of the measures announced by the Minister are welcome, they are not even a drop in the ocean of what is required. I appeal to the Government to take up Sinn Féin's proposals, change direction and get the economy back on track. I appeal to it to give hope to the aforementioned 437,000 people, many of whom have given up hope on the present Government and who are giving up hope on this country and are emigrating as a result of failed policies of the past. Unfortunately, these failed policies now are being implemented by the new Government and I appeal to it to change direction.

I now call on the Technical Group. I understand Deputy Halligan wishes to share time.

I wish to share time with Deputies Catherine Murphy, Ross and Finian McGrath.

The Deputies will have roughly seven minutes each.

I welcome any initiative, however small, that will relieve the present horrendous position in which more than 400,000 people are unemployed. Even as matters stand, unemployment is destroying the social fabric of society and testing people's well-being to extremes. Moreover, in this context one should not forget that many more than 400,000 people will experience some form of poverty or deprivation or will suffer in some way because when one includes the families and children of those who are unemployed, up to 700,000 people are affected.

This afternoon, I tabled a priority question to the Minister for Social Protection pertaining to unemployment and social welfare benefits. It sought a guarantee that they would not be cut or interfered with, because that would drive people further into poverty, and that the Government would stick by the agreement its predecessor stated would alleviate poverty by 2016. Although I did not receive a straightforward answer, I agreed with one part of the Minister's reply to the effect that by creating employment with reasonable wages, poverty could be alleviated and spending in the economy could be generated. Were this to be done, the economy could be helped to grow twofold by reducing unemployment and poverty and not being obliged to pay out huge amounts of money on social welfare, while introducing spending into the economy.

I accept that the Government has been dealt a fairly bad hand by its predecessor, but it is unfortunate that I cannot discern initiatives that would alleviate unemployment. This goes back to the old Fianna Fáil way of providing courses and training schemes for the unemployed, who do not want courses and training schemes. Electricians, fitters, engineers and plumbers are being sent on courses to be retrained but for what? Where will they get work? They want jobs for which they are qualified. Were one to trawl through the 430,000 people who are unemployed, one will find many whose families have paid for them to go through university. However, such people now are being put on training schemes or courses to help them to re-educate themselves to get themselves employed. Years ago, FÁS used to teach people how to use the telephone and how to present themselves for interview. It was, and still is, pathetic. The facts speak for themselves. For instance, although only 20% of FÁS trainees have managed to get some form of work in the past five years, the comparable figure in Scotland is 48%. Yet, Members are aware that FÁS splashed out €643,000 in junkets over the past four years. Consequently, putting people on training courses will not fool anyone.

In common with the Irish Congress of Trade Unions and many bodies, I accept that every million euro invested in infrastructure such as broadband, water conservation, home insulation and so on can create jobs. This is the direction we must take. We must opt to create sustainable, rather than part-time jobs. For example, an ISME survey found that one third of small to medium-sized businesses expect to shed jobs within the next 12 months owing to economic uncertainty, lack of finance and increasing cost to business. Moreover, more than 1,000 small businesses have been deemed to be insolvent since January 2010, resulting in significant job losses nationwide. It also has been revealed that 50% of businesses were refused credit by the banks to keep their business solvent within the past 12 months. One can ask any small business for the solution. Two of my friends, who employed seven people, closed their business in Waterford two weeks ago and they will point to rates and rent. They were paying €38,000 in rent per annum before paying rates or staff. They were obliged to let go seven staff and it will cost the Exchequer approximately €140,000 per year, or €20,000 per year each, to take those seven people out of employment and to put them in receipt of social welfare. If one thinks outside the box, small initiatives like forcing down the cost of rent or of rates come to mind. While there is an associated loss in revenue, there is a long-term gain because of the number of people who would not be placed on the live register. I do not understand who wrote the Minister's speeches or who came up with the jargon in the document I have to hand, but the mathematics appear simple. Although I am not a mathematician, if it costs the Government at least €20,000 between payments and statutory redundancy to put someone on the live register, why can it not come up with a few thousand euro to keep that person in work?

I have almost finished.

One must not forget that each year, the multinationals take €32 billion in profit out of the country. I refer to the likes of Tesco, Aldi and so on. Do they not owe the country anything? Why is there no initiative whereby they could invest some money in the country to create employment? Have such companies not been approached to suggest that instead of employing part-time workers, who may still be in receipt of social welfare benefit, they might invest some money? As they are making a bloody good living out of Ireland, could they not leave a few billion or a few hundred million euros or whatever to create employment? This is the kind of initiative that is not being put forward.

My final point pertains to procurement and the national procurement policy introduced by the Fianna Fáil-led Government in 2002. I refer to tenders in locations such as Waterford, Cork, Dublin and so on and how people now are being forced out of business because of the obligation to tender outside the country. For example, although a Dublin company got it this year, I refer to a French company that at one stage last year——

The Deputy is taking his colleagues' time now.

I really am finished this time.

Then the Deputy can sit down.

Can this policy be reviewed or revoked——

The Deputy can prove he is finished by sitting down.

—— to save jobs? All of these small initiatives will create sustainable jobs, not jobs which will see someone put on to a FÁS course to learn how to re-employ themselves.

One of the last phrases in the document read out today was that this was a modest proposal. It was not an overstatement. Seven or eight Deputies are in the Chamber. This initiative is about giving hope to people outside the House, but I do not see where the hope lies. A number of these small initiatives are worthwhile, but the scale is modest. I did not bring notes with me when I came to the Chamber, but I listened and made some notes for my response. I was worried before this debate, but I am slightly nearer to being terrified side at this stage. Were I one of the 440,000 people in question or a member of their families, I would be really worried.

I know what I expected to see, given how people were told on their doorsteps during the election campaign that there would be €2 billion in a strategic investment bank — the Government was told that this might not be a good idea — and shovel-ready jobs that would put thousands of construction workers back to work on large projects. There is no evidence of this despite the fact that it relates to one of the severely affected sectors.

Approximately 60% of all jobs are in the domestic economy, yet we rely on an export-led recovery predicated on foreign direct investment, FDI, companies, namely, the multinationals. I do not know how the Government can deliver on jobs if this is what it is relying upon. The small to medium-sized enterprise, SME, sector is where jobs will be provided. If every SME created one job, it would go a long way towards resolving the problem. A specific problem relates to the banks and securing finance. It is one matter to claim finance will be available, but the type of financing is important. There is no point in giving term loans if overdrafts are necessary.

I am greatly disappointed by the provisions regarding the sectoral wage agreements. "Flexible" and "adaptable" are code words for reducing people's income levels. The €356 threshold for employers' PRSI is just above the minimum wage, yet the Government is setting it as an appropriate target. It is much too low. While I accept there must be a limit, this will reduce the amount of money available to go back into the economy via the jobs created. I do not see how it will deliver the kind of return we need.

The €470 million to be raised in the coming years via the pension levy is a raid on pension funds. It is not targeted at the people who benefited the most from tax incentives that encouraged people to invest in such schemes. Some schemes have lost considerable amounts and some are insolvent. It is not that long since people had the daylights frightened out of them by television advertisements telling them to put money into pension schemes because they would be poverty-stricken when they were elderly. We are now telling them to put money in and that we will take it out. This is a bad message.

The tourism sector is being targeted. The UK and the US have been mentioned as markets we have lost, including a 32% loss in the number of trips from the UK. If one asks people in the UK about where they will go on their holidays, the answer will be anywhere outside the eurozone because their currency has been devalued. It is not a question of Ireland reducing the cost of rooms, although this is a contributing factor. There is good value in terms of restaurants and so on and people have responded, but the issue is the difference between sterling and the euro. This is the main difficulty we must overcome if we are to encourage the British to visit Ireland.

I would have liked to see other provisions. In terms of local schemes, 800 km of roads will be improved. This equates to approximately 30 km per county. If we are discussing modest, then this is modest. Could some consideration be given to the level of return we will receive for this modest investment? That 30% of all money invested by local authorities in road improvements goes towards health and safety matters is problematic. It is too much money and, although I would not want to put anyone at risk, the issue must be revisited.

I would have liked to see social welfare changes. For example, one must wait 12 months before one can qualify for the back to work scheme. People have told me that they would have loved to have returned to work or started their own business, but that they lost their entire network of people, their confidence and so on as a result of waiting the 12 months.

In February, Kildare County Council ran out of the money it was using to fund the microeconomic sector. If someone is putting together a viable business, funds must be available. We are underfunding the microeconomic sector. Even if someone drafts a business plan or feasibility study, new start-ups will have less chance of succeeding if we do not invest the level of work required. We have missed the boat.

Deputy Ross has seven minutes.

And one second, which the Deputy has just used up.

The Acting Chairman can dock him the half.

This initiative was our first opportunity to judge the new Government on its merits and on its own measures. I am sympathetic to the Government's daily mantra in the House, that is, to blame the current main Opposition party for the state in which the former inherited the country. This can carry some weight for a short period, but this is the first time we can point to the Government's part of the solution. It is something on which we can judge the Government.

The measure has all of the characteristics of an election promise that the Government has realised it cannot or is unwilling to keep. This is the second leg of a big back pedal by the Government on its election promises, the first being its promise to revise, amend and dramatically change the deal with the IMF and the EU. This budget — I am insisting on calling it a budget, given that it has the characteristics of a budget, including the applause from the backbenches to the Fine Gael Minister for Finance that we traditionally associate with a budget — is a damp squib that promised so much and delivered virtually nothing. One or two of its provisions are good. For example, the concentration on the tourism industry is to be commended and there are some other concessions here, there and everywhere, but the Government is tinkering at the edges. Where is the vision we would expect from a new Government that has inherited such an appalling situation? This has the markings of the Department of Finance. It has been conceded by the Government that this is being dictated by the IMF and the EU. There is nothing new, no imagination and no big picture. There is simply a tiny tinkering with tax rates.

I will echo the words of my colleague, Deputy Halligan. I cannot believe that the solution to the unemployment problem is to give a bigger mandate to FÁS, the most discredited agency in the nation. The Government intends to put 20,000 more people on training courses with a company that is utterly discredited, not just because of its junkets but also because of its training. The FÁS training schemes have been exposed as empty vessels in many cases. Why did the Minister not say, instead of promising to spend €500 million, that he would cut the FÁS budget by €500 million? Where is the promise to abolish FÁS? Instead of that, we will train people for jobs that will not necessarily be there at the end. There is no big picture.

There is one aspect on which I differ from my colleagues. We refuse to acknowledge the role played by multinationals in job creation and the development of this nation. Around 140,000 jobs have been directly created by multinationals and supported by the IDA, while 250,000 jobs have been created indirectly. That is one in seven jobs here. More importantly, this is the only identifiable area in which we can say the number of jobs increased last year, although it was admittedly by few. At a time of depression, when the economy was in decline, this sector managed to buck the trend and create 1,500 jobs. Why, then, do we not look to this sector — which, after all, accounts for a majority of exports — to support us in our hour of need? Why do we not encourage such companies to come in? These are high-end jobs; the average salary for a job in a multinational is €5,000 to €10,000 higher than for any other type of job. This is an area on which we should concentrate. We should not ridicule the prospect of reducing corporate tax if necessary. If it is necessary to attract more multinationals, let us consider the cost of doing so and say "Yes". It is estimated that a 1% decrease is equivalent to the creation of many thousands of jobs. That formula would result in the creation of many more jobs than the one that the Government, as so eloquently interpreted by Deputy Doherty, has come up with — a derisory figure.

The solution offered by the Government to raise the money has been touched on by all speakers. It is a serious problem when the Government sees a big lump of money and decides to pillage it. As Deputy Murphy so rightly pointed out, a high percentage — nearly 90% — of the pension funds it intends to raid are in deficit. They are insolvent; they are broke. Their liabilities are larger than their assets. Yet the Government says it will go in there and take €470 million a year out of these broken entities. That is the height of irresponsibility. It is also unjust, because these are people's savings. Let us not dress this up as something else: raiding these pension funds will reduce people's pensions and income. In addition, as one speaker rightly said earlier — I think it was Deputy O'Dea — if the Government can raid the savings of pensioners, it can raid next the savings of depositors. That is what will happen, because it is almost exactly the same thing. Reducing the income of pensioners will reduce their power to spend.

Deputy, I am afraid I must interrupt you.

I am just finishing. The result of this is that the austerity measures will result in a contraction of the economy. Bringing in more multinationals would expand consumer spending and possibly allow us to break out of the extraordinary spiral we are in, but the measures announced today are unlikely to help in any significant way.

I thank the Ceann Comhairle for the opportunity of speaking on the important and urgent debate on the jobs initiative. Before I go into the details of the debate, I must state that I have many friends and family members who have lost their jobs over the past 12 months. It has been a terrible experience for all of them, and that is why we have to focus on job creation as part of any strategy to deal with the economic mess. We must all think of the human side of losing one's job or not having had one at all. I urge all Deputies in this debate, regardless of party, to focus on this as a matter of priority.

Unemployment and emigration are two evils that must be tackled. While I strongly welcome some of the proposals in this package, we have a national and civic duty to come up with other ideas and sensibly costed plans to create employment. This is not the time for sitting on the fence, and we all have a role to play. Our first priority must be to buy Irish products and support our local small businesses by buying from them — whether it is a small local shop, a pub, a restaurant or a factory. This is the way forward and it must be part of the solution. For example, on the subject of funding and supporting small businesses, we should start a low-budget campaign to encourage people to spend an extra €20 per week in their local shops and businesses. This has the potential to create 20,000 new jobs. Let us remind ourselves of the €75 billion in savings that are in bank deposits at the moment. This money mostly belongs to people over 55 years of age because many of them are afraid to spend. I encourage those over 55 to get out there and spend an extra €20 per week out of the few bob they have to support local small businesses.

We also need big job creation projects as part of the strategy. One project that is ready to roll, but on which the Government is dithering, is the plan for the metro north. This has major potential for job creation — a couple of thousand jobs — but would also have considerable local impact for small businesses along the proposed route while it is being constructed. This is something that has gone off the boil in recent weeks, but it should be considered.

I welcome the announcement by the Minister, Deputy Noonan, that funding will be provided for building projects in schools. In my constituency, for example, Belgrove National School, which the Minister knows well, needs this funding. The project is ready to roll. It is the same with the Holy Faith school in Clontarf.

I have heard much debate tonight about the private sector and the public sector, but we must not forget the role of the semi-state in job creation. There is major potential in this sector to provide jobs. The recurrent theme over the past 12 months has been that private sector equals good and public sector equals bad. I strongly disagree with this. We need a mix of the public sector and the private sector to get job creation on track. A good-quality, efficient public sector can play a major part in creating jobs.

With regard to the proposals we heard today, I support the cut in the 13.5% rate of VAT to 12% by 2013. I also support the halving of the lower 8.5% rate of PRSI up to the end of 2013 on jobs paying up to €356 per week. I strongly support reversing the cut in the minimum wage to bring it back to €8.65 per hour. When we are creating jobs and providing employment, we must ensure that people have a reasonable and decent wage. I warmly welcome the abolition of the €3 travel tax as part of the deal with airlines to restore lost routes. There is potential there.

With regard to employment, we need to fix the cost base and consider issues such as commercial rates. We must stimulate the economy, facilitate enterprise and encourage job creation, particularly on the north side of Dublin.

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