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Seanad Éireann debate -
Thursday, 27 Mar 1980

Vol. 93 No. 14

Employment Guarantee Fund Bill, 1980: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

This Bill derives from the employment guarantee provisions of the national understanding negotiated last year by the employer organisations, the Irish Congress of Trade Unions and the Government. Under the terms of the guarantee, the Government and employers are each contributing £10 million towards a £20 million special joint public and private sector employment programme with a view to making good a shortfall of up to 5,000 jobs in the employment target for the year. This programme is being supervised by the Tripartite Standing Committee on Employment who were specially set up to oversee the implementation of the measures on employment in the national understanding.

Has the Minister a script? We have not got the Bill and we have not got the script.

The Bill has been published for some time and certainly that is available.

It might have been amended in the Dáil.

It was not. The employer organisations proposed that the employers' contribution to the special employment programme should be collected by way of a surcharge on the employer's social security contribution. The Bill, in addition to establishing a statutory employment guarantee fund provides, therefore, for the deduction of a special 0.35 per cent levy to be known as the employers' employment surcharge and which will apply only for the contribution year commencing on 6 April 1980.

The national understanding recognises the creation of more employment as the central objective of economic and social policy. A deep sense of commitment to expanding employment opportunities is shared by all of the parties to the understanding. The employment guarantee expresses that commitment in a practical yet imaginative way. The tripartite committee cast their net widely when inviting suggestions for the special job creation programme. They had a speedy and gratifying response from both the private and the public sectors. As a result, many extremely worthwhile projects and schemes, which may not otherwise have been undertaken, were given the goahead. I shall describe some of the more noteworthy of these initiatives in more detail later.

I paid tribute in the Dáil to the work of the tripartite committee. I am sure that Senators, too, will join with me in applauding the signal achievements of the committee. Their approach to the task of determining the content of the special job creation programme was both responsible and sympathetic. As chairman of the committee I was greatly encouraged by the constructive, cooperative attitude of the industry, employers and trade union representatives, and their ready appreciation of particular sectoral needs. Their joint initiative leading to the introduction of the employers' temporary subvention has already a very wide welcome.

The proposal for an employment guarantee was formulated in the context of the employment target for last year of an increase of 25,000 in numbers at work. When the tripartite committee met for the first time last September they concluded that there would be a shortfall in this target and decided, therefore, that the employment guarantee should be implemented.

We have every reason to be proud of our employment achievements during 1979. Final figures are not yet available, but the indications are that total employment grew by about 15,000 in a year in which we encountered many economic difficulties both at home and abroad. This is not far short of the record performance of 17,000 net new jobs achieved during 1978.

Published statistics on the trend of industrial employment are available only for the first half of 1979 but these point to an increase of the order of 9,000 in employment in transportable goods industries over the year. Employment in the construction and services sectors was also buoyant for much of the year. Drawing these trends in industry and services together, employment in the non-agricultural sector in 1979 may have grown by up to 20,000 on a net basis. Numbers employed in agriculture are, however, reckoned to have fallen in accordance with their long-term trend with the result that total employment for the economy as a whole expanded by somewhere in the region of 15,000.

The favourable trends in employment last year were reflected in the statistics of unemployment, redundancies and vacancies. With only one or two interruptions, the live register, adjusted to take account of seasonal movements in numbers, showed a continuing downward trend. Numbers on the live register in 1979 were over 11 per cent lower than a year earlier. The number of redundancies notified to the Department of Labour fell for the second year running. Moreover, the total of vacancies notified to the National Manpower Service was up substantially on 1978. In fact, there were labour shortages in some areas.

We have fared considerably better than the majority of our EEC partners. The average unemployment rate for the EEC as a whole moved up slightly last year from 5.5 per cent to 5.6 per cent of the working population. Ireland, on the other hand, recorded a remarkable reduction in unemployment—from 8.8 per cent of the working population in 1978 to 7.9 per cent last year. Indeed, our unemployment rate has fallen by almost 2 percentage points from its 1976 peak of 9.8 per cent. The average EEC unemployment rate over the same period increased from 4.9 per cent to 5.6 per cent.

We should not, however, blind ourselves to the difficulties which a deteriorating international economic climate will pose for employment in 1980. It is expected that economic growth in both the OECD and the EEC will be much lower than last year. Accompanying this lower level of activity will be a rise in unemployment in most member countries, an increase which will be quite sharp in certain instances. The Commission's annual report, published at the end of last year, on the economic situation of the Community and economic policy guidelines for 1980 predicts that the average unemployment rate for the Community will increase to 6.2 per cent. The report's assessment of our situation suggests that growth will remain moderate in 1980 and that, in view of the initial impact of dearer imported raw materials and the effect of wage indexation, there could be unfavourable consequences for job-creation which might well lead to a deterioration in unemployment, given the rapid rise in the labour force.

Nevertheless, as I affirmed in my budget statement, the Government are acutely conscious of the need to do everything to support and increase employment. It was with this objective in mind that I specifically structured my budget so as not to hit the sources of growth and employment. Notwithstanding the restraint which necessarily had to be imposed on public expenditure this year, I made priority allocations for particular activities which I saw as contributing in a significant way to increasing soundly based employment in the economy.

Investment in infrastructure provides a great deal of on-site employment and also greatly facilitates the task of the industrial promotion agencies. I provided, therefore, for a 32 per cent increase in Public Capital Programme spending on infrastructure. I decided also to increase substantially the budgets of the industrial promotion agencies. Córas Tráchtála have been allocated 31 per cent more than they spent in 1979, while the allocation for the Industrial Development Authority is 21 per cent up on last year. These represent increases way above the level provided for generally in the 1980 Estimates.

These brief remarks on the employment situation will give Senators some idea of the general frame of reference within which the Tripartite Standing Committee on Employment have been examining proposals for the special joint public and private sector employment programme. The committee have met so far on nine occasions. They have drawn up certain criteria for their guidance in the allocation of moneys from the employment guarantee fund. These criteria provide, for example, that the fund should be used to support (i) the creation of new jobs which would not be created in the usual course, (ii) the maintenance of existing jobs which would otherwise be discontinued, or (iii) the bringing forward of permanent jobs which would otherwise not have commenced until later.

In the normal course, the contribution per job would not exceed £4,000 but, in circumstances where the provision of facilities would have a demonstrably positive impact on the attraction of investment and employment to a region, the committee may allow a higher upper limit. This in itself is clear evidence of the committee's commitment to support worthwhile projects.

£20 million was available under the national understanding for allocation to the special employment programme. The committee have to date reached agreement on broad allocations amounting to £18 million and should complete the allocation of resources in the very near future.

I have spoken already of the committee's support for the employers' temporary subvention. The Government have been obliged to terminate the employment maintenance scheme as from the end of this month as a result of EEC objections to the scheme. As this scheme helped to safeguard the jobs of many workers in the clothing, textiles and footwear industries, its withdrawal would have the effect of putting many of these jobs immediately at risk. The tripartite committee accordingly decided to apply portion of the employers' contributions to the employment guarantee fund to financing a new scheme which will operate from 1 April until the end of the year. Under the terms of the scheme, a subsidy payment of £5 per person employed will be made to firms for a period not exceeding 26 weeks and a payment of £4 per person for the following 13 weeks. The scheme will be administered by a steering committee of employer and congress representatives. Firms employing more than 100 persons will be required to submit development plans as a condition of qualifying for the full benefits under the new scheme.

The committee also decided to support the proposal made by the Taoiseach that moneys should be made available from the employment guarantee fund for a programme of job creation through the provision of sports and other recreational facilities. This programme will be administered by Cospóir, the National Sports Council, and will involve the construction of several major community sports and recreation centres, as well as a number of smaller-scale projects at various locations around the country. The Minister of State at the Department of Education will shortly be submitting a detailed programme for approval by the tripartite committee. As I explained in the Dáil, this is a major new initiative and will not be in substitution for Government spending on youth and sporting organisations. The facilities to be provided under the programme will be available to entire local communities. Indeed, projects will not be supported from the fund unless a clear assurance has been given that they are not for the exclusive use of a particular group or groups.

Other noteworthy projects or schemes supported by the commitee include: a temporary extension of the employment incentive scheme to cover the payment of a temporary supplementary premium of £10 per week in respect of all eligible persons under the scheme and a further temporary supplementary premium of £10 per week in the case of each eligible person who has also been on the live register for at least 26 weeks in the 12 months immediately preceding employment under the scheme. This is unique among the employment measures in that it provides a particular incentive for reentry into the labour force of the long-term unemployed. The supplementary measures came into effect on 31 December 1979 and are due to terminate on 30 June next. A 1,000-job public sector programme including environmental improvement schemes, temporary youth employment projects, tourist amenities and county development team projects. An AnCO scheme for the recruitment of 200 additional engineering apprentices. Construction of an airport at Waterford. Provision of a dredger and pilot launch for Waterford Harbour to be built by Ross Company Ltd., New Ross.

I have already mentioned that the employment guarantee fund is jointly Financed by the Government and by employers. The Government's contribution of £10 million will be provided from moneys to be voted by Dáil Éireann.

The employers' £10 million will, at the suggestion of the employers' organisations be raised by way of a surcharge on the employer's social insurance contribution. The original intention was that the surcharge should be collected under the pay-related social insurance system and that deductions should commence before the end of 1979 but this was found not to be practicable. The tripartite standing committee accordingly agreed that the introduction of the surcharge might be deferred to 6 April 1980—the beginning of the 1980—81 contribution year. I should add that this did not interfere in any way with spending on approved projects as the Government, last December, paid £3 million from their contribution into a grant-in-aid account opened specially for the purpose.

The tripartite committee also agreed that the surcharge should not apply in respect of public sector employment as the Government were contributing separately to the employment guarantee fund.

The text of the national understanding specifies a surcharge of ½ per cent on the employer's social security contribution. The tripartite committee confirmed, however, that the purpose of the surcharge was to raise £10 million and that the rate of surcharge should be determined accordingly. The Government have, therefore, at the request of the employer organisations, taken a great deal of care with the calculation of the required rate of surcharge. The rate required, on the best information available, is 0.35 per cent. The surcharge will apply only for the contribution year commencing on 6 April 1980.

The Bill makes the necessary statutory provision for implementation of the employment guarantee provisions of the national understanding and I commend it, therefore, for the approval of Seanad Éireann.

Any money made available to help unemployment is welcome and particularly at present when there is a widespread growing fear about future employment prospects. Having said that, it must also be emphasised that this fund is being set up largely through the good offices of employers who will contribute up to £10 million to the fund. The contribution forthcoming from the Government can be obtained by pruning down on other Estimates for other Departments and other sections of the national economy. It should also be said that we are not unique in having such schemes to help people in difficult times.

This fund is being provided within the context of circumstances which are most unfavourable for future employment. The Minister is already on record as stating that there are great doubts that the employment targets for 1980 will be achieved. With a projected 1 per cent growth rate only for 1980 one can envisage that this will have certain adverse effects on the employment levels. We are all aware of the vast increase in the school leaving population and so many thousands of young people will be coming on the market from June onwards that anything which can be done to ease the burden on their parents is welcome. Parents are expressing great concern about finding suitable and adequate opportunities for their children.

Recently there have been various hints and nods about certain cuts in living standards which might be expected by the public next year. This does not set up a favourable atmosphere or climate for receiving the ultimate co-operation of trade union organisations and the work force. That has to be borne in mind when considering the effect this fund will have on easing and softening the burden of unemployment. Inflation is now raging at such a rate that there will be a very substantial—indeed, excessive, and I would almost say shameful in the present day circumstances of world economies—increase in prices between now and the end of this year. This will mean a reduction in demand for certain products which will mean a cut-back in employment in the manufacturing industries related to those products.

The Central Bank have already put on record their concern about credit. The tight credit restrictions we will see over the next year will likewise have an effect on investment and the creation of employment opportunities. In the context of all those rather unfavourable circumstances facing us we see this fund being set up.

I want to pay tribute to the work I have seen done by the IDA in conjunction with various bodies such as chambers of commerce and local industrial development organisations in trying to create certain employment opportunities and in trying to create production methods which can substitute for imported materials. There has been a good response by various chambers of commerce and local development organisations to the scheme set up over a year ago by the IDA. In one region they received something like 60 or 70 projects which were set out in quite considerable detail by the people who were interested in creating new employment opportunities and, out of those, of course, will come some positive employment opportunities.

The Minister referred to the textiles industry. We did not move early enough in applying more sophisticated methods to the textiles industry. For example, West Germany at least a decade ago went into the upper strata of this industry where rather more sophisticated textiles are the norm. We did not realise early enough that developing countries in the Far East and in the Third World generally, would have to be given the option of going into the textiles industry for employment creation in those countries. We paid the penalty for not moving quickly enough into manufacturing textiles in a rather more sophisticated way. We must raise our sights in this Field. We cannot continue subsidising the industry in competition with Third World countries. There is a political aspect involved in allowing Third World countries to go into the textiles employment field. We must raise our sights and standards in the textiles industry in Ireland in future.

Section 7 deals with winding up the fund. Subsection (2) provides:

The Fund shall be wound up when the aggregate expenditure from the Fund (inclusive of payments out of the Employment Guarantee Fund grant-in-aid account) reaches £20,000,000, and any balance remaining in or to the credit of the Fund shall be paid into or disposed of for the benefit of the Exchequer in such manner as the Minister may direct.

I hope that, since the employers are contributing to this fund with the specific intention of maintaining, preserving and creating employment opportunities, the Minister will not allow any balance of funds remaining to be disposed of other than in that sphere. That would be a disservice and a reflection on the motivation behind the fund.

It is mainly through the goodwill of the employers that this Bill is here before us today. The Government can obtain funds by pruning expenditure in other Departments. It is interesting to read in the Estimates presented a month ago that the employment guarantee fund showed the largest percentage increase over 1979 under any departmental heading that I could see. This gives us an indication of the rather severe times which lie ahead of us and I hope those severe times will be short.

I certainly do not oppose this Bill but there are some qualifications about the manner and purpose of the use of the fund which might be appropriately mentioned. Even in these rather dark days of slowdown of growth in the United States and Europe, one should try to concentrate on development plans rather than on mere maintenance of existing output and employment. Maintenance subventions, however necessary, must remain temporary expedients to be justified by the breathing space they provide for adjustment, adaptation and change—in other words, for the retraining, re-equipment, modernisation, or whatever may be needed, to put employment and output on a sound, lasting basis. This is a point which applies to all firms, not just to the larger firms employing 100 or more. Some years ago small expert teams were organised, when we were considering entry to the EEC, to study the conditions necessary for the survival and development of particular industries. Perhaps there is a role for them in the context of this employment guarantee fund.

What we are dealing with in many sectors, especially the labour-intensive industries like textiles and clothing, is not just the effect of present depressed world conditions, which one might expect to be off-set once we entered again a cycle of stronger growth. Essentially we are dealing with a situation in which there is a permanent threat to the viability of certain industries coming from increased competition from newly industrialised areas of the world: Hong Kong, Singapore, Korea, Taiwan and Brazil. This competition is accentuating and making more immediate the threat to labour-intensive industries which have not adapted to change. It is a threat which is made more acute by the prevalence of sluggish trade conditions in major markets.

We cannot ignore the need for us to hold our place in world trade in more normal times, not by clinging on to outmoded and non-competitive forms of production, but by constantly moving up the scale in technology, quality, design and value added. As Senator Markey said, we should be moving on to more sophisticated products appropriate to our higher income and employment expectations.

This, I suggest, is the only valid and effective response to the difficulties we are now in. I believe the Minister recognises this. I was glad to see from a report in today's The Irish Times that the Irish Congress of Trade Unions also recognise it. Their vice-president, Mr. Dan Murphy, is reported as saying there was a danger of being over-cautious and missing the opportunities which new technology presented in terms of eliminating boring jobs, moving people to interesting occupations, reducing working time and securing a substantial share of the increased wealth which higher productivity would bring.

There is a good deal of misunderstanding about the growing competition in certain sectors from the newly industrialised countries of the Far East. Anxiety is understandable in particular sectors where markets are being penetrated and taken over to a large degree. But there is a tendency to forget that the industrialisation of the Third World is necessary and desirable for human progress. There is a tendency to forget that the overall effect on output and employment in the western world itself is beneficial. These newly industrialised countries are importing far more than they are exporting. They are running into debt to do so. They are large and expanding markets for the exports of the older developed countries.

The net trade balance of the older developed countries with these new developing countries has been positive in recent years in all but two categories of manufacturers: clothing and other consumer goods. The older industrial countries are, for example, still increasing their exports to these new countries in chemicals, agricultural and industrial machinery, machine parts, road vehicles and so on.

One may ask what is the net employment impact of all this change in relationship between the developed and developing countries? The studies that exist show that the net employment impact on the older countries has not so far been adverse. There has been, on the contrary, as OECD estimates suggest, a substantial positive employment impact over the period 1973 to 1977 of close to 200,000 jobs annually in the OECD area. In other words, the older industrial countries have been developing additions to employment through their net trade surplus with these newly industrialised countries. There has been also, as one would expect, an upgrading of employment in the older developed countries because the jobs created by exports to the developing countries are in more skilled occupations with more value-added than in the jobs displaced by imports from those countries. I think it is well to offer these general observations so that our efforts to maintain and develop employment will be set in a broad, enlightened and sustainable framework consistent with our favourable attitude to Third World development and not in a narrow, protectionist one.

Finally, may I make another general point? I suggested in public a few months ago, and would like to repeat in the context of this debate, that we should beware of a tendency to over-emphasise employment as our principal policy aim. I say this not because increased employment is not an extremely important objective but because another objective logically precedes it. Increased production on an efficient basis must be the first priority in this highly competitive world. If we seek this first and achieve it to a high degree, the great boon of new and secure employment will be added. But to the extent that we fail to raise output on competitive terms or stop moving up the scale in technology and value-added we shall be missing opportunities to create durable new jobs. The worst possible combination from the employment aspect would be a low rate of growth, an overprotective concern for less efficient industries, high grates of increases in money incomes and prices and an intolerably large external deficit.

I welcome the Bill and the statements made about it by the Minister. The affairs and the activities of the tripartite committee are, of course, confidential to a high degree. Consequently as a member of that committee, representing the Irish Congress of Trade Unions, I feel that perhaps I should not go into detail in respect of the committee. However, in introducing the Bill the Minister specified a number of areas in which the tripartite committee have assisted and supported projects including the provision of a dredger for the Ross Company, the money to be provided by the Waterford Harbour Commissioners. It is a fact that the tripartite committee have given support of a certain nature to this project. It well may be that this is dependent on certain moneys being provided by the Waterford Harbour Commissioners. I would like to ask the Minister in the event of it not being possible for the Harbour Commissioners to provide the necessary funds in support of this scheme, if he will seek to have the provision of a dredger made possible by some other means either through further assistance by the tripartite committee or out of governmental resources. It is very important that the Ross Company should be given this contract. About 300 jobs are at risk in a small area such as Ross. If the company have to close down, there will be a spill-over into other areas in County Wexford and perhaps throughout the country.

The provision of the dredger will not solve the problems of the Ross Company. It will help to tide them over for about six months during which time I suggest that the Government and the Minister should have a look at the real problems affecting the company. The Ross Company are a shipbuilding enterprise and, unfortunately, Irish fishermen and even the Government are not giving orders for the provision of boats and vessels to Irish shipyards. Most of the orders from fishermen around the coast are unfortunately going to other European countries, mainly the Netherlands. If this company's problems are to be solved on a permanent basis, the problems of other shipbuilding yards around the country will also have to be solved. If employment is to be maintained and extended in all these sectors the Government will have to do something, perhaps give grants through An Bord Iascaigh Mhara, to ensure that Irish shipyards get a fair share of the orders for boats and vessels and so on for Irish fishermen and others.

In referring to the employment scheme the Minister said that it had to be abandoned because of EEC commitments and objections. I do not know how valid the objections are but I do know that other member countries seem to be getting away with absolute murder. Only the other day Mrs. Thatcher stated that France seemed to ignore completely EEC regulations and provisions. Perhaps the Minister could take this matter up and give us some information about the non-adherence of some member countries of the EEC to their own commitments.

It gives me great pleasure to welcome this Bill. It would be true to say it follows in a natural order of progression from the manifesto of 1977. In my opinion that still stands as one of the outstanding manifestos or programmes I have seen. The major priority was and still is the creation of more jobs. Once again let it be stated that we are in a unique position. This has often been stated before but it cannot be stated often enough, that half of our population is under the age of 25. That makes the task of providing jobs for our young people in particular a tremendous undertaking, a tremendous responsibility. Already we have signs that the strategy is working. The creation of between 15,000 and 20,000 new jobs in 1979 was indeed a remarkable achievement.

In his speech the Minister gave very encouraging figures with regard to employment. The average unemployment rate for the EEC as a whole rose last year from 5.5 to 5.6 per cent of the working population, whereas we had a decrease in unemployment from 8.5 per cent to 7.9 per cent. That is a remarkable achievement and it puts shame on those who go on with the constant complaint that we are getting worse and worse. Since 1976 when we were at our peak as far as unemployment was concerned, our unemployment has dropped by 2 per cent but sadly unemployment in the EEC increased during that period from 4.9 to 5.6 per cent.

The purpose of the Bill was stated quite clearly by the Minister. Everybody can read it for himself. It proposes to work on the lines of the creation of new jobs which would not be created in the usual course. That shows the imaginative approach of the tripartite committee in tackling the unemployment problem. Secondly, there is the maintenance of existing jobs which would otherwise be discontinued. It is a fact known to everybody that existing jobs are in grave danger at present because with the advance in technology, new types of machinery, implements and even clothing are coming on the market every day. It will require all the ingenuity of the tripartite committee and the Government to safeguard as far as possible the jobs that already exist. Thirdly, there is the matter of bringing forward permanent jobs which otherwise would not have commenced until later. This is very important. There is mention of a figure of £4,000 per job. It seems a very big figure but when you relate it to the advantages that will accrue as a result of people being usefully employed it is a very reasonable figure indeed. I have already commended the tripartite committee. I wish them every success indeed. They are doing a wonderful job.

All of us should be determined to work more efficiently. Unfortunately at present many people who have the name of working for, say, eight hours in actual fact work for four and dodge along for the rest of the time just filling in the time in the hope that the job will be prolonged. That is one of the great diseases in the country at the moment. This attitude has crept in on us; yes, we would like to get jobs but at the back of our minds we have a reservation; yes, we would like the jobs but no work. Work is a thing to be very proud of, it is something we should all love to do. If we could get that message across to the people, then the battle for full employment within our State would be won.

I am sure we all welcome the creation of this fund and hope that it will improve the employment situation. I would just like to draw a little attention to the possible direction of the schemes that may be brought forward by the tripartite committee for this fund and to say how necessary it is that such schemes should be directed towards areas where there already are, in fact, as the Minister pointed out, labour shortages and unfilled jobs, directions where there are hopes of creating real and permanent productive employment. However desirable it may be to provide schemes for things like environmental improvement, these are, as it were, jobs which can tide-over temporarily periods of unemployment but will not provide productive and real industrial employment or other kinds of permanent employment for the future. In a way, what is called today environmental improvement schemes are today's answer to the famine walls and congested district piers of the past. They provide needed employment, they provide something for unemployed people to do. They are desirable in themselves but they are not a permanent solution.

I was very glad to see on the list in the Minister's speech that one of the schemes is to be an AnCO scheme for the recruitment of 200 additional engineering apprentices. As has been seen in a recent article in one of our national newspapers, this is one of the areas in which there are still, in fact, labour shortages both at technician level and at the higher technological levels of university graduates. Anyone who is involved in our educational system will know that there are certain areas where people can look for jobs with success even though there are so many school leavers coming on the labour market.

It is interesting that in the early sixties there was a major survey of our educational system carried out under the auspices of UNESCO of which the chairman was Professor Patrick Lynch. Even then it was pointed out that far too much of our educational system was geared towards producing arts graduates and people who wanted to go into banking, law, medicine and so on and far too little towards the technological sector. Yet in 1980 while the position has improved somewhat, the same tendency is still there. There are far to many people trying to enter law schools and medical schools, to go into banking and commercial jobs, which are looked on as sort of white collar jobs as opposed to jobs in industry where in many ways our school leavers and graduates could be of much more use to the economy.

I would like to press on the Minister's attention that this fund and the schemes thereunder should be, as far as possible, directed into industries and into areas of employment where there is hope of genuine expanison and permanent employment in the future.

The article to which Senator McGuinness has just referred published yesterday in The Irish Times revealed an equation which simply does not add up when one is considering the position of young people looking for jobs in our economy. While all the career planners are urging young people to go into industry and at a time when one-third of the work force is engaged in industry, a survey conducted by AnCO reveals that less than 3 per cent of those leaving school see their future in industry. This survey was carried out not only in the west of Ireland but in Dublin. This is at a time when the head of the IDA forecasts that there will be between 25,000 and 30,000 jobs available in electronics within the next five years.

It is a problem which should merit urgent action by the Minister. It can be tackled on two fronts. First of all, we have got to get it across to young people long before they leave school that there is a future for them in industry, in electronics and in all the other associated trades. They should be preparing themselves for a future in industry. To do that, we have got to look at the subject of career guidance as it appears on the curricula of our schools. In half of the second-level schools there is no career guidance teacher and in those that have career guidance as a subject it all too frequently consists of a local industrialist coming in to give the leaving certificate pupils a pep talk. I do not think that it is realised that career guidance should start very much earlier than that. Children are capable of being assessed at primary school level. This should be done; they should be streamed and turned in the direction in which we want them to go.

The other front on which we should be working is to convince parents that their children will get an equal, of not better, education in our vocational schools. The tradition in rural Ireland is that after primary school the girls go to the convent and the boys to the brothers. When one suggests that there is an extremely good vocational school which has lots of places, where they will not be sitting one on top of the other in tin huts, the parents react as if one were suggesting condemning their children to a term in Loughan House. This is an attitude which is responsible for putting more square pegs in round holes in this country than anything else I know of. It is something we should take very seriously and tackle.

We cannot underestimate the influence of parents in the choice of their children's career. One hears all too frequently nowadays some very sad stories. I happen to know of a very clever young girl who is now in her second year in law in university. She will probably qualify and she may be a good lawyer but the only thing about it is that she does not want to be a lawyer. She wants to be a model or work in a shop and sell clothes. Because she is very intelligent she was encouraged by the career guidance teacher to go for law as she has a very good leaving certificate. She is extremely unhappy and frustrated. The attitude of parents over the years has been to encourage young people to go for an academic career. We are turning out more and more doctors from our universities and the frustration of these graduates when they find after all the investment of time and money that they will not be able to get a job in their own country is quite appalling. It is high time that we had a good look at where we are going.

That is the only point I wish to make in this debate except to say that I welcome the Bill. I regard it as a reaffirmation of the Government's commitment. Since this Bill is an integral part of the tripartite committee it is a restatement of our national commitment to the protection and creation of employment.

We all welcomed the national understanding. It was a new approach where three sections of our community, the trade unions, the employers and the Government got together to negotiate something for the benefit of the community as a whole. The national understanding covered a far wider field than normal trade union negotiations. It covered increments, social policies and, among other things, it covered production. It also dealt with the creation of jobs.

With regard to the creation of jobs, the Minister has told us what the Government intend to do and have been doing in this area. We have the figures of the jobs that have been created over the past two or three years. Also we have a tangible move on behalf of employers through this fund to show that they are committed to increasing jobs. At times it has often been felt that employers may have been more concerned with increasing production rather than actually increasing jobs. This is a commitment to increasing jobs.

As Senator Whitaker has said, we have to increase production initially to be able to increase jobs. If we are to increase production, we have to be competitive. I was very disappointed to read in the national press today that in a situation where the Government are aiming to create jobs and the employers are creating a fund to create jobs, a certain trade union is congratulating itself on the gains it has obtained in wages increases for its members over and above the national understanding.

I am glad to see that the tripartite committee have delineated the type of jobs which they hope to create: one, the creation of new jobs which would not be created in the usual course; secondly, the maintenance of existing jobs which would otherwise be discontinued; thirdly, the bringing forward of permanent jobs which would otherwise have not commenced until later. This is something which may not come into being without this fund.

Mention must be made of the fact that the employers' temporary subvention has been stopped because of EEC regulations. To a certain extent it is a disappointing situation because this subvention was to assist industries, particularly the textile industry, that were in difficulty due to the cost of labour. We find that on certain occasions they have been enjoying the benefit of this subvention and suddenly when it comes to an end there is a threat of closure and a loss of jobs. In other words, during that period in certain cases there has been no attempt to become more efficient to meet the competition which they have to meet. Some of them have another chance and with the use of this fund they now have a chance to be competitive again. The Minister in his speech said that firms employing more than 100 persons in this connection will be required to submit a development plan as a condition of qualifying for full benefit under the new scheme. I welcome this Bill.

I thank Senators for their comments on the Bill at this stage. The comments were general and comprehensive, and were particularly helpful to me. This Bill is not all-embracing. Its aim is to make good a shortfall as far as possible. The decisions of the tripartite committee should be seen in that context. I sympathise with the view expressed by most Members who spoke here that our priority must be to concentrate on productive employment particularly in the technological areas. The fact that in the balance of the jobs being provided for under the tripartite committee, there may be provision for jobs that are not productive is not at all to negate the principle that has been stated by Members here and to which the Government firmly adhere.

I will just deal with most of the points in principle that have been raised by various Members. That will enable me in this brief though wide-ranging debate to reply to the points on the Bill and to make some general comments on some very important general principles that were mentioned by speakers this morning. The provisions here are not in substitution for anything that the Government or the Minister for Finance, in particular, has cut back on in public expenditure. To present it in that way would be completely to misunderstand the purpose of this Bill. Senator Kennedy is right in that one cannot go into specifics here because there is a degree of confidentiality involved in the jobs mentioned this morning. Most of them had already been approved in principle before the Government provisions for public expenditure for next year were announced. In those provisions I and the Government concentrated particularly on the principle I now take to be endorsed by the Seanad, namely, the establishing of foundations for continuing and long-term investments and employment. In response to Senator Markey I deliberately did not use the expression "cuts in living standards". Expressions can sometimes be misunderstood or presented in a wrong way. I would have said, "reductions in our income expectations" which is a very different matter. We are all faced with the realities that have been sketched out by very many Senators this morning.

We have to absorb certain problems that are forced upon us from outside, and in doing so we have to ensure that our own considerable capacity to adjust will be strengthened. That means an adjustment of income expectations, if for no other reason but that the actions of the oil-producing countries have transferred at one hefty stroke the purchasing power from the countries dependent on energy to the countries producing it. I agree with Senator Whitaker's analysis in relation to the effect which these matters have had on the developing countries. We must adjust to that and to the fact that the developing countries in particular have to use the opportunities and advantages of lowcost products, because of the low level of earnings.

To compete within the developed world, we must at least keep to a standard which they are adhering to. Our income expectations cannot go beyond what is being accepted as the norm within the community. That was the case last year and I make particular reference to the indexation provisions of the national understanding which were unduly generous. That is not my opinion but the considered opinion of the Commission of the EEC that was endorsed by the Council of Ministers of the EEC. It is in that sense that we must have a reduction in our income expectations.

With regard to the textile industry, which was touched on, and in particular the arrangements we have for the substitution of the employment and maintenance scheme, I agree that it is vitally important, in view of the reality of the Third World countries that Senator Whitaker has referred to that we do not engage in what would be for us unwelcome competition with these countries, competition in which we could not and should not succeed at their expense. Some of the elements in our textile industry have not been prudent enough to take the necessary steps in their marketing and production to ensure, in the light of this inevitable pattern which has been clearly visible over the last number of years, that they could adjust to avail of the undoubted opportunities that are there particularly up-market in this area. While some have failed to do that, it would be overstating it to say that we failed where many of our partners have succeeded. Very many of the textile industries established here, particularly over the last 15 years, have secured their position both in terms of production and marketing, in the higher bracket of the market particularly where there is still great scope to the extent that they are not at risk at this time. The vulnerability of our textile industry generally is less marked than that of many of our partners in the European Economic Community. It is regrettable to the extent that some did not recognise this reality and now we have to react. Reacting is never a very positive approach in terms of economic planning and development, either nationaly or in terms of industrial sectors. Now that the reality has been brought home to us, I feel that it is something, in our employment programmes generally, in our approach to readjustments and reallocations of resources in this area, that the Government will bear in mind in ensuring that we can cope with this new reality.

I agree entirely that it is not just in the interests of the developing countries that they be allowed the opportunity of developing their potential. As Senator Whitaker said, the experience over the last number of years has been that the developed countries have developed their potential and expanded their employment programmes not at the expense of the developing countries, but to some extent, through the contributions of the developing countries. As we, in a sense, reach a point of saturation in the consumer capacity within the developed world, we have to ensure that in reorganising and rationalising our industrial programming, we give scope to these countries, if only for the selfish reason that they will provide the markets as their economies expand for the products that otherwise cannot, and will not be consumed at a level that we need in our economies at this stage. That reason is not the most pressing because if one were to approach it only from a selfish point of view in terms of our national or regional interests within the EEC, one would have to accept that reality. That theory is the one that is called the interdependence of the new economic world order, which is recognised now in the way it was not before. It is also right and essential that we should recognise their right to development in the same way as we would promote our own.

The environmental schemes, or other schemes such as the temporary subvention scheme in substitution for the employment maintenance scheme are of course temporary expedients. No member of the tripartite committee would suggest that it is any more than that. It is meant to deal with problems that surfaced as long ago as last September in certain areas. To that extent one of the great advantages of the tripartite committee was their flexible approach to needs as they arose. The best example of that was their readiness to introduce this new scheme in substitution for the employment maintenance scheme. If the committee did not agree to do that, it would have been impossible for the Government to do it because to introduce a scheme similar to that which has been terminated because of the EEC regulations would obviously be at least against the spirit of the EEC regulations in the whole area of competition policy and it would not have lasted any length of time.

The temporary employment subsidy scheme in Britain will also be terminated from the end of this month. This subsidy is being provided from the employers' element contribution to that fund, and it is being administered by a joint committee of the employers and the trade unions. Because they are involved in that sense, the scheme should not in any way run counter to the regulations in the EEC which direct their attention more to Government actions as distinct from those of other sectors.

In relation to the obligation to move on to more sophisticated production techniques, to train parents and children to think in terms of these priorities and having got them to readjust their thinking, to provide the training programmes for them to exploit these new opportunities, the Government and I as Minister for Finance with responsibility for economic planning, are very conscious of this. This morning I attended a meeting of a Cabinet sub-committee which is concentrating on the area of training technicians and technological graduates and of ensuring that in our allocation of resources to various Departments we concentrate on these areas.

There is a great need at second and third levels to reallocate resources and to redirect the attitudes of parents, in the first instance, and teachers and all concerned. This will have to be a continuing programme right through the next decade. The reality is that there is the risk that even those we train in these areas—we have at least the advantage of an available pool of potential skills in our young people—may be tempted away from here to other countries who have a different demographic structure from what we have at the moment. We have to ensure having regard to the trends, for instance in Germany, France and the Netherlands where the problems of the next decade or two will be the problems of having an adequate pool of skills and labour to maintain their industries, that we will not suffer because some of our people trained here would have better opportunities abroad. I assure the House that in terms of the allocation of resources and the priorities within those allocations, and also in the programme for training and education generally, we will ensure that we are specifically geared to cope with the new era of technology in industry and in agriculture.

The outlook for the next year in terms of employment both in the OECD and the EEC is not encouraging. These are realities we have to face. As Senator Cranitch said, the fact is that the trend here has if anything been against that trend elsewhere. When unemployment generally has been increasing among our partners it has been decreasing here. That was not always the way. That at least gives us the essential confidence in our capacity and determination to succeed. There may be a tendency to over-emphasise employment, which is of course a very important element. There is the objective of increased productivity. All of us have to be very conscious of that. I, in framing my budget, was very conscious of that in terms of the inducements in the new income tax schemes announced to ensure that people would see that it is vitally important they give of their maximum and not feel penalised as they earn more as a result of the increased productivity which they will promote through constant attendance at work and constant commitment when they are at work. This increased productivity does not just depend on the worker. It depends on the readiness of industry to adjust to new production techniques, to invest as a mark of confidence in themselves, as a mark of trust in their work force, and a mark of confidence in new technology and to continue through their training programme at management level to ensure that there will always be this progressive and continuing forward approach to increase productivity and job satisfaction and guarantee our place.

About 50 per cent of our total production depends on exports and that is certainly higher than any of our partners. Other countries such as Germany or the Netherlands may have a greater internal capacity to consume home manufactured products but if we were depending on home consumption we would very soon go into a decline. For that reason, it is not just enough for us to respond in the way that our partners respond in terms of productivity, commitment, determination and investment in new technology, we have to move ahead to exploit the possibilities and to ensure that we can nearly guarantee continuing secure employment.

I am sure Senator Kennedy, who has been a member of the committee longer than I, would agree that it has been a very encouraging and reassuring experience for all who have been concerned in it. In relation to the Ross Company, as a matter of course the committee will keep in very close contact and will ensure that the proposals I have just referred to will be implemented as envisaged by the committee. I cannot say that agreement in principle has been reached with the Waterford Harbour Commissioners. Now the Ross Shipyards have got a breathing space, and this is just one example of the kind of thing the committee have been doing very successfully through the agency of this fund. It is important as Senator Kennedy said, that Government agencies of every kind be encouraged although there are EEC regulations that must be taken into account. This is something that the Government are very conscious of in relation to that shipyard and in relation to others also.

Senator Kennedy was not here when I mentioned in passing the United Kingdom scheme for a temporary employment subsidy, which is also being terminated this month. I certainly will watch closely for any obvious or not so obvious breaches of regulations by any other country, particularly from any of our main competitors. We are the last country who can afford to restrict our capacity and watch others, by breaking the rules or by paying no attention to them, exploiting the situation.

In relation to matters like environmental schemes and so on, the committee would be the last to suggest that these are other than productive in the sense that I mentioned. Senator McGuinness touched on these matters. Nonetheless, when one looks at the broad package that will eventually emerge from the committee, it represents a balance which provides for employment, not just for the short term, but also in the long term in many cases and also represents very real balance in favour of what we could loosely call productive employment.

This is initially a Bill for a particular purpose. The House understandably took the occasion to make some observations which I found very useful, and all generally in line with Government policy in this area. When the problems are obvious the solutions are equally obvious.

Senator Markey asked a question, which I can deal with on Committee Stage which I hope the House can take now. It is important that we get this Bill through in view of the need to replace the employment maintenance scheme.

Question put and agreed to.
Agreed to take remaining Stages today.