Vol. 789 No. 3
6. Deputy Mick Wallace asked the Minister for Jobs, Enterprise and Innovation the publication date for the Action Plan for Jobs 2013; if all actions set out in the Action Plan for Jobs 2012 will be achieved before work on the 2013 plan commences; and if he will make a statement on the matter. [3307/13]
Work on the Action Plan for Jobs 2013 has already been under way for several months. The Government recently held a special Cabinet meeting on jobs, as we did last year, to ensure that every opportunity has been taken across Government to support this central priority of Government. I am currently finalising the 2013 plan on behalf of the Government. The action plan will be published in the coming weeks and will once again include a range of actions to be delivered across Government that will improve the operating environment for business, improve Ireland’s competitiveness and support job creation. This plan is a key instrument in our objective to transform the economy from one that became over dependent on property, construction and debt to one focused on enterprise, innovation and exports.
A final quarterly report on the implementation of the 2012 plan will be published very shortly. I anticipate that, in keeping with the high level of implementation reported for the first three quarters of 2012, the final progress report will indicate an implementation rate of close to 95% for all actions which were due to have been delivered last year. Any actions which were not fully implemented in 2012 will, for the most part, be included in the 2013 programme for completion. Often, this was due to slower than anticipated delivery of new legislation. A very small number of actions which were not possible to implement due, for example, to budgetary constraints, will be replaced with other deliverables in 2013.
Key objectives have been realised under the action plan for jobs in 2012, including implementation of measures to improve competitiveness, access to finance, support to enterprise and the development of sectoral strategies to protect and create employment. In 2012 there was also significant net job creation by Enterprise Ireland and IDA Ireland-supported companies, building on the positive results of 2011 and following successive years of significant net job losses.
The Minister outlined many of the initiatives designed to create a better climate, yet the Nevin Institute estimated that the budget for 2013 will cost between 25,000 and 35,000 jobs, reduce GDP by 2.1% and lower private consumption. Its report stated:
Budget 2013 resulted in continued cuts in the public capital programme. This is likely to result in job losses in the short term, and in the long term severely reduce the ability of the economy to grow, sustain the level of national debt, and take advantage of any upswing in the world economy. There is a compelling case not only to accelerate investment in priority infrastructure areas but to bring forward plans to reform banking and to establish a Strategic Investment Bank as mentioned in the Programme for Government.
The Minister mentioned that access to finance has improved in 2012. From my experience with the banks and from that of many businesspeople I know, it appears that any effort banks are making to meet targets set by the Government mostly seem to be geared towards readjustment and refinancing of existing packages rather than new finance. A strategic investment bank, which the Government promised, would be a wonderful idea, given that it would have complete control over it. Even if the banks claim to be doing something, experience has taught us to take much of what they claim with a considerable amount of salt.
I believe the point the Deputy is making is that if we did not have to engage in fiscal consolidation, money would not be taken out of the economy. Equally we inherited an economy in which government spending was running ahead of revenue by 40% to 45%, which nobody would argue is sustainable. It is not possible to sustain expansionary fiscal policy on the basis of such high levels of borrowings. We certainly cannot do so when the only source of borrowing we effectively have is the troika. We do not have the option of fiscal expansion in that context. The issue of stimulating investment relates to the instruments the Government has been addressing. The strategic investment fund is crucial and the Minister of State, Deputy Sherlock, just outlined some of the ways that is being leveraged up through the NPRF. Overall, those funds represent approximately €2.5 billion of new non-bank sources of finance being made available to SMEs in the various formats that have evolved. That is part of the strategic investment fund. That is what the Government is doing to make it easier to access finance. The Deputy is right in saying the banks have not fixed this problem. There is a long way to go before we have banks fit for purpose in the context of funding SMEs and considerably more work needs to be done in that area.
There is talk of downsizing the public sector by a further 6% through renegotiating the Croke Park agreement. Through my business I have a number of units in the city centre. Every time a public sector job goes, there is less money in the pockets of people passing the doors of retail units. The biggest problem today in the retail sector is a lack of sufficient money in the pockets of the people who walk the streets. Every cent the Government takes has a counterproductive effect. As with other countries, this State borrowed so much for the banking sector. I made the point yesterday that the Americans borrowed $700 billion to invest into the banks on the basis that it would go towards helping people with mortgage difficulty and repossessions. Less than 1% of it went towards that - $4 billion out of €700 billion. We have had the same problem here with loans of more than €60 billion gone to banks. There is a good argument that giving money to the people who will spend it because they have no choice makes the economy healthier in the long term.
The difficulty is the State cannot use taxpayers' money to prop up consumption that is falling or to prop up spending in areas that are declining. There has been a huge shock in this economy with many jobs lost in the construction sector, which has had a huge impact. When it is on its knees financially, the State is not in a position to substitute for that spending in the economy. Therefore we need to try to use the money we have and spend it smartly.
We are trying to leverage up assets in the pensions reserve fund to fund the start-up of new companies in the export and enterprise sectors. That is the strategy. It is the only viable route we can go. We cannot bring back those jobs lost in sectors which grew too large or were unsustainable for different reasons. We must create sustainable jobs. This is what the resources of the State are being used for.
What about nurses and other people on low wages, all of which is spent on meeting their cost of living? Reducing the wages of nurses by 20% is not economically sound.
We have to reduce spending by approximately €3 billion next year. We must at the same time try to maintain services in the health sector. A reduction in the cost of the public pay bill is clearly an element in our being able to maintain public services, including health and social welfare services and social welfare payments. There is a balance to be struck between the different ways in which one continues to deliver service. If one can reduce the pay bill and still deliver a quality service that must be done. Restructuring and redesign of ways of working forms part of getting ourselves out of our current difficulties.
7. Deputy Niall Collins asked the Minister for Jobs, Enterprise and Innovation the way specific measures taken by him under the Action Plan for Jobs have benefited those in the 18 to 24 age group; and if he will make a statement on the matter. [3316/13]
13. Deputy Barry Cowen asked the Minister for Jobs, Enterprise and Innovation the way the specific measures taken by him under the Action Plan on Jobs have benefitted the long term unemployed; and if he will make a statement on the matter. [3318/13]
I propose to take Questions Nos. 7 and 13 together.
The rise in youth unemployment as a result of the global economic downturn is a challenge for most EU countries. The average EU unemployment rate for those under 25 years of age in the labour force is 23.7%. In Ireland, the youth unemployment rate is 30%, while the long-term unemployment rate is 8.9%.
The aim of the Action Plan for Jobs is to create a supportive environment for enterprise to create and sustain jobs. All of the measures in the action plan are designed to promote employment opportunities in different ways and many young people and long term unemployed people will benefit from the implementation of these measures. Many of the sectors we have focused on supporting under the action plan, such as digital gaming, ICT and tourism, offer opportunities particularly suited to younger workers. Labour market activation programmes administered by other Departments, such as JobBridge, Springboard and Tús also aim to increase youth employment.
The Department of Jobs, Enterprise and Innovation has worked with business representative bodies to highlight the range of supports available to companies who recruit people from the Live Register. These include Revenue’s job assist scheme and the employer’s PRSI exemption scheme operated by the Department of Social Protection. The Department of Social Protection also operates the back to work enterprise allowance for long-term unemployed people wishing to set up their own business. Measures to support micro-finance and mentoring are particularly important to people who have been out of the labour market for some time or to young entrepreneurs who do not yet have a track record.
As part of a suite of measures aimed at improving access to credit for SMEs and entrepreneurs under the Action Plan for Jobs, we have established the Microfinance Fund targeted at entrepreneurs, start-ups and existing microenterprises employing not more than ten people. The County and City Enterprise Boards provide a range of services, including training and mentoring, to people wishing to set up their own business, including those on the live register. Enterprise Ireland also has a range of funding supports available for entrepreneurial activity. For example, the agency launched New Frontiers, Ireland’s largest entrepreneur development programme in February 2012. It supported 60 companies through the Competitive Start Fund last year and also introduced a new Competitive Start Fund for female entrepreneurs.
Through the new Momentum initiative, the €20 million labour market education and training fund operated by the Department of Education and Skills will assist 6,500 long term unemployed jobseekers to gain skills and to access work in sectors of the economy where there are job opportunities. This initiative includes specific provision for those under 25 years of age. The Government as a whole will continue to do all it can to facilitate the return to work of those who have lost their jobs or to get their first job. In addition to the Action Plan for Jobs, the Government’s Pathways to Work strategy is focused on assisting the long-term unemployed to move into employment through more regular engagement, upskilling and training.
The Minister, Deputy Bruton, is currently preparing the 2013 Action Plan for Jobs on behalf of the Government and in that context, we will be exploring further measures which can be taken to transform our economy and support job creation to support these groups of unemployed people.
I thank the Minister of State for his reply. The difficulty is that we are fighting a major fire with a water pistol. I welcome all of the worthy initiatives referred to the Minister of State. While I accept he may not have this information with him now, will the Minister of State provide an update on the microfinance fund, on which we are receiving some negative feedback with regard to pricing. What is the uptake of the fund?
The Minister and his Ministers of State could use the opportunity of the Presidency to address this European-wide problem. Surely the entire resources of Europe could be used to ensure a consistent Europe-wide effort in addressing unemployment among those aged under 25 years. Our only direct solution appears to be dependence on emigration. That is what is happening.
The Minister of State referred to activation places. An analysis of the CSO figures for December indicates just over 5,000 additional activation places were created in 2012. There will be only 2,000 additional CE places this year. CE schemes provide people with a wonderful opportunity to obtain a skill and gain experience. The Minister of State also referred to gaming. Despite that this Government and the previous Government invested a great deal of resources in the gaming sector, I met a graduate this week who, having obtained a degree in that area, cannot get a job because he does not have work experience. Despite the introduction of all of these initiatives our long term unemployment situation worsened during 2012 and our youth unemployment situation has fallen, but only because of emigration.
I acknowledge everything that the Deputy said. There is no getting away from the fact that the rate of youth unemployment is extremely high, including across all of Europe. A strong attempt is being made during Ireland's Presidency of the EU Council to give effect to the youth guarantee and to ensure that we create the climate across Europe, in a way that will benefit Ireland, to ensure a return of people to work.
The Momentum scheme was launched before Christmas last under the auspices of the Department of Education and Skills. There will be specific projects available under that programme to assist those aged under 25 years in a return to employment through training to work opportunities and a graduate activation programme.
Thank you, Minister.
Am I out of time?
Yes, unfortunately. There are only four minutes allowed for supplementary questions. I understand Deputy Tóibín also wishes to ask a question.
There is something else we can do. This became apparent over Christmas. The difficulties being experienced by people who sign off to take a temporary or three-day week job over Christmas and the nightmare it is for them to sign on again needs to be addressed. Surely the Department of Jobs, Enterprise and Innovation could bring its will to bear on the Department of Social Protection to introduce some flexibility in the jobseeker's scheme so that a person who takes up temporary employment does not lose all his or her benefits or is not left waiting for months for reinstatement of their entitlements when that employment finishes and they have to sign-on again. Surely a measure could be introduced to assist people who are willing to take up temporary work opportunities. The Department of Social Protection should make special provision for people who cannot continue in such employment, for whatever reason, so as to ensure they are not out of pocket.
Again, I acknowledge the points made. The Deputy must also acknowledge the deep structural changes that gave rise to this unemployment crisis which, as stated by the Minister, Deputy Bruton, in a reply to an earlier question, was our dependence on construction, in which sector many of the skills were employed. A sudden downturn which results in one having to make a correction of the order of €38 plus billion over a five or six year period requires one to find new ways to create labour market activation measures. We believe we are succeeding. For instance, many jobs have been created through the JobBridge scheme.
I heartily acknowledge that there is a crisis in the area of youth unemployment.
We in the Chamber have not got our heads around how serious is the issue of emigration. We seldom debate the issue in depth. In the past four years, six out of ten jobs among those between the ages of 15 and 24 have been wiped out. A total of 70,000 people in the demographic have emigrated since the Government took office, with 134,000 people in the same demographic emigrating in the past four years. The total population of the demographic is 630,000 people. This emigration has had a shocking effect on the areas which have been depopulated. We have deleted in large part one of the most energetic sections of our society. This has had a proportionately much bigger effect on unemployment levels than anything the Government has done. We need a singular debate on the issue of emigration.
This goes back to what Deputy Wallace stated, and the IMF has also said it. The critical point of fiscal drag is a negative multiplier whereby every euro taken out of the economy reduces the economy by more than a euro. I believe wholeheartedly we are at this stage or have gone past it. We speak about ensuring the books balance, but the books are balanced not only by cutting but also by growing. If the Government grows the economy it will not have to cut the wages of low-income individuals as much and ensure we do not forcibly exile such a large and significant part of our society.
To repeat the point, we all agree the problem of emigration is scaring the social fabric. However, I do not agree with the rhetoric that it is all negative.
On balance it is negative.
A hell of a lot of initiatives are taking place in our third level institutions, and out there is a boundless creativity which does not work its way into the discourse in a House such as this. One has only to go to these institutions and meet these people. I take issue with the point made by Deputy Tóibín on this.
On balance it is negative.
I repeat the point that if all one's eggs are put into the construction basket and a downturn in the sector occurs, it will give rise to emigration to new areas where there are opportunities such as western Australia, Canada and North America. This is exactly what we are seeing happen. From a sectoral point of view we are seeing this trend. We want to reverse this by creating the programmes we have to allow people with this skillset to retrain and move into other sectors. We are doing this and by degrees we are slowly succeeding in this vein.
Written Answers follow Adjournment.
