Seanad Éireann debate -
Thursday, 16 Jul 1981

Vol. 95 No. 23

Employment Guarantee Fund (Amendment) Bill, 1981, [Certified Money Bill]: Second and Subsequent Stages.

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

Minister of State at the Department of Finance (Mr. B. Desmond)

The purpose of this Bill is to amend the Employment Gurantee Fund Act, 1980, so as to permit a further Exchequer contribution of £10 million to the Employment Guarantee Fund.

You will recall, a Chathaoirligh, that the second National Understanding for Economic and Social Development provides for a Government contribution to a new Employment Guarantee Fund. The previous Government were committed to making £10 million available for that purpose and, as I announced in Dáil Éireann on last Thursday 9 July 1981, this Government are prepared to fulfil that commitment.

While the text of the Second National Understanding speaks of a new Employment Guarantee Fund, no practical purpose would be served by setting up an entirely new fund, rather than extending the existing fund, and there would be considerable administrative complications in doing this. I am satisfied therefore that the best way of fulfilling the commitment under the second national understanding is to provide further resources for the existing fund.

It is proposed to amend section 4 of the 1980 Act so as to increase the limit on the amount which may be paid into the Employment Guarantee Fund out of moneys provided by the Oireachtas from £10 million to £20 million. Amendments to section 7 of the 1980 Act are also required so as to provide for:

(i) an increase of the limit on aggregate payments out of the Employment Guarantee Fund from £20 million to £30 million;

and

(ii) the winding-up of the Employment Guarantee Fund when the aggregate expenditure from the fund reaches £30 million, instead of £20 million as provided for in the 1980 Act.

The Employment Guarantee Fund under the first national understanding comprised a Government contribution of £10 million and an employer contribution —also of £10 million. This latter contribution was collected by means of a 0.35 per cent surcharge on the employer social security contribution for the period 6 April 1980 to 5 April 1981.

The £20 million which accrued to the Employment Guarantee Fund under the first national understanding has all been allocated for a very wide variety of job-creation projects. There are 33 such projects and employment created as a result of these projects will amount to 2,800 man-years of employment approximately. Of these, 1,800 man-years arose in 1980 and 1,000 man-years will be achieved in 1981. Employment arising from the further Exchequer contribution to the fund of £10 million will be additional to this.

Unfortunately, there will be no employer contribution to the Employment Guarantee Fund under the second national understanding. This is a response which I very much regret. Therefore, the Government will alone contribute. I should, however, point out that the employers will voluntarily contribute 0.2 per cent of payroll towards financing a further new scheme of aid for industries in certain sensitive and vulnerable sectors. This scheme, which will be known as the Employers' Employment Contribution Scheme, replaces the Employers' Temporary Subvention Scheme funded from the Employment Guarantee Fund. It received the approval of this House on 27 May 1981. It operates independently of the Employment Guarantee Fund and is administered by the employer organisations themselves.

I gave an undertaking in the Dáil that, in deciding on the uses to which the furthe sum of £10 million for the fund will be put, the Government will consult with employer and trade union representatives. I repeat that undertaking here. The involvement of the social partners in the allocation of the original £20 million accruing to the Employment Guarantee Fund under the first national understanding was a very constructive development and was welcomed by both employers and the trade union movement. I would like to pay tribute to the employer and trade union representatives who participated in this work. Indeed, I might point out that my colleague, Senator Fintan Kennedy, was a member of that committee and, as I understand it, he attended a great many meetings of that committee. That is the kind of contribution which was made and for which the Government are indeed most grateful.

I am confident that this Government will have fruitful dialogue with the social partners on this and other matters. There are many features of the common programme agreed by the two parties represented in this Government which meet concerns felt by employers and workers. In particular, this Government are committed to the concept of planning for economic and social development. Effective planning is assisted by the co-operation of employer and trade union organisations and I hope that this co-operation will be forthcoming.

Accordingly, I recommend that this House approve the Bill and, with the co-operation of Members, I hope we will be able to obtain all Stages today. As it is a Money Bill we had to have the Seanad meet. We would be grateful to have all Stages passed so that the necessary consultations can take place now between the employer-trade union organisations with the Government and we will then proceed to expend the fund as expeditiously and as effectively as possible.

Ruairí Brugha

I welcome the new Minister of State, Deputy Barry Desmond, to the House and wish him well in his work in the Department to which he has been assigned. There is no hesitation on this side of the House in welcoming this proposal and we will, of course, give it all Stages. The sooner it is approved and the Minister is allowed to proceed with the underlying objectives in providing the additional £10 million, the better.

It is, as the Minister says, regrettable that the employer side is not involved in this. I understand that there are good reasons for this. One should welcome the voluntary contribution of .2 per cent mentioned by the Minister in connection with a further scheme for aid for industries in certain sensitive and vulnerable sectors. I would be glad if the Minister, if he is in a position to do so, will indicate some of the areas in which it might be proposed between the Government and the social partners to expend this. The situation in which the Government find themselves is no different from the situation in which the previous administration found themselves, trying to provide positive, effective remedies for securing employment on as broad a scale as possible. This measure, we take it, is intended to continue the objectives of the previous administration in that regard.

I note that the Minister said that in deciding the uses of the fund he will consult with employer and union representatives. It may be possible that he is not in a position to indicate the areas in which it might be intended to use the funds. If so, I can only welcome his efforts and encourage him to engage in the dialogue to which he has referred with the social partners I welcome the Bill and hope the Minister will have a fruitful period in office as a Minister of State.

Mr. Kennedy

I should like to welcome the Minister and wish him well in the difficult task that lies ahead. Concerned as we all are about the very serious unemployment position, all Members must welcome this Bill intended as it is to improve job creation. If there is one note of criticism it must be that the amount of money provided for the fund is inadequate. We can say already, in advance of applications being made for grants from the fund, that it will prove inadequate. That has been our experience in respect of the first fund set up under the first national understanding. Very soon after the fund was set up and went into operation the number of applications for finance to support different projects far exceeded the £20 million in it. In view of the deteriorating economic position this will undoubtedly be our experience perhaps at a very early date in respect of the fund. Bearing that in mind and also the fact that, as one who participated in the joint committee administering this fund, I found that most of the applications were worthy ones and all designed to create employment opportunities, including the new Waterford Airport project which was justifiably supported, I ask the Minister to keep the matter under review with a view to exploring the possibility, and the desirability, of increasing the amount of money in the fund if that is necessary as, unfortunately, I think it will be.

I note that section 4 relates to an upper limit but I am not quite so certain that, regardless of that limit, the Government through some means or other could increase the amount of money in the fund if desirable. I know it is early days yet for the Minister and he may not be in a position to give that guarantee but I should like to ask him to consider reviewing the work of the committee and the amount of money in the fund from time to time with a view to adding to it if necessary.

Mr. Kilbride

I welcome the Bill and I appreciate the importance of promoting employment and educating the younger section of our community on the need to prepare themselves to produce something with their own hands. The opportunity should, to a greater extent, have been a means of allaying the consequences of unemployment and the lengthy dole queues for a period more than was provided in the original legislation. I congratulate the Minister and assure him that he will get full support from this side of the House. We hope that the educational as well as the practical results of this will be of benefit to our people.

Minister of State at the Department of Finance (Mr. B. Desmond)

I should like to thank Senator Brugha, Senator Kennedy and Senator Kilbride for their kind comments on my appointment which I appreciate. Senator Brugha inquired about the prospective areas of expenditure in future. The simple answer is that as yet the Government have not taken any decision on the allocation of the £10 million. We have undertaken to consult with the social partners on the allocation, notwithstanding the fact that the £10 million is an exclusive Exchequer contribution at this stage. The only general point I should like to make about the allocations is that they were of a very dispersed variety previously and my inclination is that they should be confined, perhaps more rigorously, to job creation in the wholly productive sense. It is very difficult when very limited funds of this nature are disbursed on job maintenance as such which, essentially, can be the job of other State-supported agencies. In fact, in terms of employment guarantee one would wish to see it going by and large towards job creation and in particular to help difficult areas of job creation. There might be an impression among State and other bodies at this stage, in the light of submissions made for future disbursements, that they are going to receive subventions or that they have been absolutely assured of such subventions. I want to disabuse them of that because the Government have not taken any decision at all and we will be looking entirely afresh at the area of expenditure. To that extent, Senator Brugha, I am precluded from elaborating further, but I can assure the House that the social partners will be fully consulted on that before there is a Government decision.

It is a difficult area, that concept of a guarantee fund under a national understanding. It is argued that, for example, if one disburses money from a fund of that nature for the construction of a sports centre essentially it should come under the Department of Education. If a company on the verge of liquidation or receivership seek money it is arguable that they should get the money through other State supported agencies such as Fóir Teoranta or if they want money to engage in export work they should go to CTT rather than to the Tripartite Committee seeking money by way of the guarantee fund which was not necessarily created for that purpose. I can assure Senator Kennedy that the fund, particularly in the context of a future national understanding, will be kept under review and that particular point will come up in the not too distant future, assuming that there will be further negotiations on another national understanding. Naturally an increase of any amount of money available is entirely dependent on further legislation because we are quite limited in the Bill today to the additional £10 million guaranteed by the Exchequer.

These are the main points I would like to make in reply. I want to thank the Senators for their co-operation and I assure the House that the points made will be borne in mind in any future consideration regarding disbursement of the fund.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without recommendation, received for final consideration and ordered to be returned to the Dáil.