Level of Unemployment: Motion.

Mr. Ferris

I move:

That Seanad Éireann, noting the continuing increase in the level of unemployment recognises the need to identify the sources, consequences and the appropriate short-term, medium-term and long-term responses to unemployment in terms of investment, planning, income maintenance for the families of the unemployed and further recognises the need for integrated dignified services being made available for those who have lost or who are seeking employment.

I move this motion in my name and those of my colleagues. Those of us who have been involved in recent weeks in campaigning realise that unemployment is a burning question in everybody's mind. Many people consider employment as a right, as stated in Article 45.2 of the Constitution:

The State shall, in particular, direct its policy towards securing i. That the citizens (all of whom, men and women equally, have the right to an adequate means of livelihood) may through their occupations find the means of making reasonable provision for their domestic needs.

Today's figure of 196,309 unemployed appears very far removed from that pious aspiration that was included in our Constitution and, unfortunately, all the indications are that this dreadful trend is to continue for some time in the future.

Can we identify the sources of this disease, with all its consequences for social behaviour particularly amongst our young people? If we can identify the sources of the disease and if we can take effective action in the short term and if we are seen to be planning in the medium and long term, then I feel the youth of this country would have their confidence restored in our democratic institutions. If not, it is a fact accepted by all of us in public life that the democratic institutions of this State could be quickly overcome by civil unrest due to total disenchantment with the system as people understand it and know it.

It is time, also, for an all-party approach to this dreadful problem of unemployment and I include politicians of all political shades, the trades union movement and the employers. I commend the Taoiseach on the recent initiative he announced towards this aim, bringing together all the people involved in this whole spectrum of employment to make an effort to tackle this major scourge on our economy and people.

Governments alone cannot solve the problem and have failed to solve it, particularly over the past eight or ten years. From 1979 to 1982 the numbers on the live register rose from 88,600 to 179,900 and in that period alone we had two, if not three Governments, of different political shades of opinion. In spite of changes of Government and emphasis of one Government or another, the problem still faces us. Even since that figure at the end of 1982, it has continued to rise to its present-day level of 196,000. Within that figure of 196,000 we have the startling figure of over 60,000 people under the age of 25, which has been confirmed by the Central Statistics Office. Another startling figure is the number of people over the age of 55 — there are some 20,000 — who still have not arrived at pensionable age or even retirement pension age. People in the age group from 55 onwards will have the gravest difficulty in either being retrained for new jobs or gaining access to scarce jobs which are no longer on the market for them.

The total number of people at work is 1,146,000 people and the rest of the population — about 2,000,000 — are dependent on them. Those of us who are fortunate to be gainfully employed are carrying a tremendously large burden of dependency.

The figure for the labour force as it will be in 1991 does not have any solace for us either. By then it is reckoned that it will be 1,407,000 people. That takes into account our increasing population. When we look at that as a challenge and try to identify what we have to do about those numbers available on the labour force, then this Government and all the people involved in the economy have a major task in front of them. That figure is an increase of some 14 per cent over the figure available in 1979.

If we can identify the reasons for rising unemployment, perhaps we might as a Government and as a nation try to tackle them. Everybody recognises that the recession started with the oil crisis of the seventies which created escalating costs, lack of competitiveness and shrinking caused by the lowering of consumer demands. We have an increasing population which over the past ten years has risen more swiftly than that of any of our European partners. We must consider the lack of alternative employment and remember that we were dependent in the past on emigration. We must look at all those reasons for the present unemployment situation and then tackle each individual sector.

Unemployment continues to rise internationally. In the OECD area alone it affects 31½ million people, or 9 per cent of their labour force, an increase of about five million people in that area within a year. If we just confine our vision to the EEC, with which we are so closely associated, the unemployment figure there is almost 12 million, or an increase of 10.5 per cent in the last period under review. In other words, we lost a quarter of a million people in the workforce in the EEC in the last 12 months. These figures are so frightening that one must ask what, if anything, can the Government and the Community do about the unemployment problem. The Community seem to be powerless within their own constraints of budgets and otherwise to do anything about this problem.

The most recent publication of the European Parliament News of October 1983 reports that during a major debate in the Parliament the Commission put forward proposals which, adopted by the Council, would, they claimed, create 2½ million jobs for under 25-year-olds within the next five years. The ideas put forward by the Commission included a shorter working week, help for the young to start up in business, more in-work training and more jobs in the public sector. Commissioner Ivor Richards expressed concern that the unemployed and out of work may become an alienated sub-group in our society, and agreed that the Council need to act as a matter of urgency. Surely that is just a statement of the situation as we know it. Any of the suggestions initiated in the debate are ones that we have already looked at. We have made some impact on the youth unemployment situation, which I will deal with. I welcome the Minister of State at the Department of Labour, who has a specific responsibility for youth affairs and youth employment. I will be listening with interest to his response to this debate.

In that European Parliament debate nothing of significance was contributed by any member. In reply to the debate Ivor Richards said:

It really is not good enough for Parliament to demand the moon in relation to unemployment and then to castigate the Commission because we are not prepared to join in their stratospheric attempts. I have no intention whatsoever of engaging in gesture politics with the unemployed of this Community. The Commission has tried to put forward realistic targets.

In my opinion that response and the debate in the European Community are indicative of the powerlessness of the Community to do anything constructive about unemployment. Let us hope that the reported upturn in the US economy will have a beneficial spin-off in this country, particularly through the assistance of the IDA. I want to compliment the IDA for the assistance they have given to the setting up of manufacturing industries in this country. Many of us have been engaged in direct consultation with members of companies from America and have discussed with them over recent weeks the possibility of setting up processing operations in this country. There is an indication that there is an upturn and that the country will benefit from it.

Today's report from the Economic and Social Research Institute would lead one to hope that there is possibly room for improvement and an upturn in the economy. The report specifically mentioned that there would be a betterment for those people at work, and whereas that is to be welcome, certainly there is no comfort in it for people who are not at work.

Apart from the American and Japanese technological developments which are likely to take place in this country, we must look at the basic economic problem within our shores and what we can do about it. One of the first questions one must ask is what is to be produced, for whom it is to be produced and how it is to be produced. Marketing has a most important role, and I cannot lay sufficient emphasis on its importance to anybody engaged in the production of any commodity, whether it be for the home market and for export. In the agricultural sector particularly, Irish marketing expertise has proved to be beneficial throughout the European Community, the Third World and elsewhere.

Regarding what is to be produced, I think that is always decided by the consumer, depending on the consumer's income and his capability to acquire the product. The second and third questions, for whom and how it is to be produced, are matters for the producers. They always base their opinions on their industrial development on profit margins and what areas of profits are available to them. In a mixed economy like our own we try to stimulate the private sector, sometimes without any regard to the responsibility in the public sector. Tax incentives must be given by the Government to encourage people to go into manufacturing industries which would have a beneficial downstream spin-off in all the service industries, as well as all the other benefits that flow from a factory in an area employing people who, by reason of their improved income, create demands on other services, whether it be hotel and catering, drink, car hire or holidays. They all benefit from the fact that an industry is located in an area.

In the past, private enterprise has not answered this challenge. Representatives from the private enterprise sector have always indicated that they have no incentive whatsoever to go into manufacturing or processing. We have become almost totally dependent on multinationals to set up, simply because they apparently have funds available to them with which they are prepared to make more risks. In the past the private sector have been given certain assistance by way of grants through the IDA. A lot of expertise has been made available to them, but because of the other disincentives, they seem to be slow to take up this challenge.

People in that area now tend, unfortunately, to put their money into gilt-edged or tax-free investments, often outside the jurisdiction of this country, with no benefit whatsoever to the economy here. If that continues to happen, then definitely this economy will suffer. There is a responsibility on all of us to see what can be done in the area of trying to stimulate Irish entrepreneurs. In any discussion in the area of wealth tax or taxing wealth it is necessary to differentiate, and I am in total agreement with taxing wealth on the basis of tax equity. When we are talking about wealth we must differentiate between productive wealth and non-productive wealth. My belief is that wealth which is put into gilt-edged securities outside this country is non-productive wealth and should be treated and taxed as such. People who put their wealth or whatever assets they might have accrued into productive areas should be looked at separately and treated separately.

It is important also that assistance would be forthcoming for smaller industries. I am delighted that this House and the other House have set up a Joint Oireachtas Committee on Small Businesses. For Ireland in particular there is a future in this kind of trend. In Northern Ireland where there is a major unemployment problem — 25 per cent as compared to our 15 per cent — they have published a special booklet on how they can help a business to start up, to grow and become profitable, and its emphasis on the area of small industries.

The proposed change in the social welfare code would allow people who are at present unemployed to involve themselves without loss of benefit in trying to start in the area of self-employment, in small industry. I hope all the guidance of the State would be available to them through the IDA, through AnCO, the Youth Employment Agency, Manpower and so on, and that all these agencies would be available to people, particularly those on the social welfare unemployment system at the moment. If this change of legislation comes through these people should be given every incentive, without penalising them, to start small industries in their own back garden.

I wish to pay tribute to the Youth Employment Agency, to their director, Niall Green, and to their board for the way in which they tackled youth employment. They have been subjected to criticism from a lot of people. It is important that we look at what they have been trying to do and the structures with which we agreed. It was the Labour Party who first thought of setting up the Youth Employment Agency. I do not think there will be any objections from those involved in employment in contributing to the work of the agency if they see what they have managed to do.

In the areas of AnCO and ACOT, through their green certificate in farming, and CERT, the hotel and catering industry, they have managed to employ 28,000 additional people. In work experience programmes they have employed 9,000 people. In community training programmes, temporary youth employment schemes, environmental improvement schemes which have been run through local authorities, you can add a further 7,000 people. Under the agency a figure of about 48,000 additional people under the age of 25 were employed. That is a good record which should be put on the record of the House, especially as they are at times subjected to quite a lot of adverse public criticism.

The Leas-Chathaoirleach is also on the record as condemning employers for the abuse of some of these schemes. They have been known to use them for cheap labour. At the end of the training period they tend to allow the group of people who worked for them and who were assisted by the State to go out of employment. They create an unfair competition on people who have a genuine commitment to this programme and want to try to keep the people whom they have trained in employment. If that is happening on a wide scale — and I heard some complaints last weekend about it in specific instances — I would be extremely worried about such abuse of what is a very good scheme if it is implemented properly.

In the area of the public service we as a Government have a major and a special responsibility, not alone to maintain employment in the public service, especially in essential services, but also to ensure that the social aspect of these services is not totally obscured by economic factors alone. In that category you can include any of the sectors you like — CIE and the importance of its passenger and goods service, its infrastructural importance in the regions and the full usage of the existing infrastructure available to CIE, with the consequent saving on the national roads by taking large trucks off the roads and using the network which is there. There is a major responsibility on CIE to look at what we consider to be their economic and social role as a State agency.

The ESB recently initiated a five-year plan without even consulting with the trade union movement in the ESB itself. A management document was submitted to Government for discussion involving a possible loss of 1,800 people right across the spectrum. All of us have met the unions and I am glad that they have now made clear their attitude to the five-year strategic plan which was published by the management of the ESB who were responsible for the decisions as to where strategic factories and energy-producing plants were established. They now produce a plan to close them all down. This is so important to the workers of Bord na Móna. These two semi-State bodies are trying to balance books at the expense of one another and both of them could lose out in the end. We could lose a colossal number of jobs among people who have been traditionally engaged in both the ESB and Bord na Móna in the use of our national product to run power stations. We have it growing in our own soil. If two semi-State bodies cannot get together and make a suitable arrangement, it is a sad reflection on those who are responsible for the management in these areas of the public service.

I do not exclude health, the social welfare service, the educational system and the local authorities, all major employers in the public sector. The consequences from a social point of view of any major cutback in either the number of people engaged in these sectors or the implementation of an embargo on staff are very great. I have the gravest reservations about any staff embargo applied on a blanket basis throughout the public service. There are specific areas in the public service where an increase in employment is of vital necessity, particularly the health sector.

The Minister for Health is concerned that we have new units which cannot be opened because of the embargo. We have understaffing in areas of crisis in hospitals where people's lives could be at stake. I do not think there is any justification for the implementation of a blanket staff embargo in the public service. Each of these suggested embargoes should be considered on its merits. Certainly we can have efficiencies and we should and can have savings. Efficiencies can be too expensive if they involve the care of people who are unable to look after themselves.

Agriculture is one of the most important sectors of our economy. The unemployment consequences of the super-levy for those engaged in farming and the farm processing industry, in milk, meat and any other area of produce from farming, will be serious for us as a nation. We cannot put up a strong enough battle on that. We must be totally united at farming organisation level and at political level. That sector directly and indirectly contributes to 40 per cent of the employment of this country and is a major area of responsibility for the Government. I hope that by bringing all the social partners, all the employers' organisations and trade unions and all the political groups together, either in this joint Oireachtas committee or as a specific task force outside of the specialised task force set up by the Government, we can meet this challenge. If we do not meet that challenge the young people who will be looking for jobs within the next two decades, will not forgive us for not having tackled this problem. It will not go away and must be tackled. To allow other Members an opportunity to make a contribution in the debate I will conclude. A member of my party will have the right to reply at the end of the debate.

Mr. M. Higgins

The wording of this motion on the Order Paper is unusual in so far as it sets out quite clearly a set of questions which need to be addressed in the debate and in the ministerial response. In that regard I should like to begin by welcoming to the House again the Minister of State, Deputy Birmingham, who was here for what all of us agree was a very comprehensive debate on youth unemployment. Youth unemployment is, indeed, part of our problem this afternoon, but we are not dealing with it specifically. We are dealing with the overall situation in employment.

The structure of the motion listed questions which ask for answers. The motion reads:

I propose to say a few words about each of those categories of questions which should not be avoided, evaded or simply passed over without sufficient seriousness. With regard to the sources of unemployment, I have noticed in the public debate about the volume of unemployment a reluctance to acknowledge that the level of unemployment in the current year, and in previous years, is something entirely different from unemployment in preceding times. I want to be specific in my statement about this. There is a reluctance among the professional economic community, and among economic commentators, to acknowledge the fact that the unemployment with which we are dealing now is not cyclical unemployment of the old kind, that it is unemployment of a structural kind rising in volume and extent. It is entirely different from the unemployment that the State has had to deal with before now. The implications of that are clear and I will return to them. We cannot handle that kind of unemployment by measures that were used to handle the problem in a different shape and magnitude at a different level.

Of course, in relation to the sources of unemployment it is true to say that some of the traditional sources are still adding to the figures of unemployment but a number of the old myths have been shown to be false. I will give one instance. One of the sources of unemployment has been the decrease in on-farm opportunities for people in agriculture. It has been an old myth to suggest that what would happen in Ireland from the fifties into the seventies and eighties would be a transformation of the country with industrial employment being provided to take up the people who left agriculture. Industrial employment, a few brave people said, could not only take up this but also the natural increase. We were led to believe that what one would have would be a neat transition from heavy dependence on agriculture towards a balanced services sector and an industrial sector which would provide us with the employment jobs we needed. This, of course, has not happened.

We make reference to the consequences of unemployment once again because I believe that these are not adequately estimated. I am not saying that people are burying their heads and ignoring them. I am simply saying that they are not treated by adequate linkages between, for example, the services of Government. I have to say that — I am afraid it is not often said — unemployment is unusual in relation to being a status. Many people choose to become doctors — not many actually, mostly about 70 per cent of the people between the professional classes enrol in medical schools. By and large, less than 2 per cent of people in the unemployed, unskilled categories enrol in universities at all; 67 per cent of the people who are above the professional level enrol in universities. It is not true to say — I must correct myself — that many people choose to be doctors. Some people have a vocation towards medicine and other people choose to work at different things. Unemployment is unique in so far as it is a status that is usually not chosen. Yet, even though it is a status that is not chosen, we go on to acknowledge as if it was normal that a person suffers a whole series of automatic forms of social stigma as a result. When one has no work to go to, when one simply is not earning income, one is not only diminished as a consumer with purchasing capacity but being unemployed itself is a badge of a different status in the community. In that respect the consequences of unemployment are simply not being understood popularly.

In relation to the appropriate short-term, medium-term and long-term measures, when this wording was being put into this motion what was very much in mind was the barren debate in the European Parliament on the question of unemployment. It did not yield very efficient strategies towards tackling the problem of unemployment at European level. Short-term measures are those measures which can not only speed up such job creation that is going on — that is very difficult at present — but also measures of job protection. We will have to stop being coy in this regard. We have to think frankly that unless we are willing to depart from the economic criteria of judging such operations that prevail at present by the social criterion of job protection being built in also, it will simply add unnecessarily to the volume of unemployment. Medium-term measures — I have spoken about this elsewhere — can, for example, generate employment that is ecologically desirable, socially valuable and so on. I will put those two together and say that it is old hat — almost at this stage eccentric — to suggest that the unemployed can hope for a return to growth and, following a return to growth, we can tackle the unemployment problem. It is not only nonsense but madness. For that reason we need such intensive projects as will provide us with employment.

In the long-term, people have not been willing to face up to the debate about the impact of technology on our society generally. In 1800, for example, the amount of free time that a person had out of the 24 hours was something less than 11 per cent. By the year 2000 it will be 30 per cent. In fact, the amount of time spent working and the amount spent on leisure will have inverted themselves. It is no hope to those people who are unemployed to tell them that we are looking forward by the year 2000 to a workless society. Quite frankly, in the long-term what we have to realise is that we need the structures that can harness technology in such a way that it does not damage employment and that it will have a social impact that will be of benefit. That debate is not taking place here.

Equally, in relation to investment there is a great deal of coy nonsense going on. I am getting a little weary of picking up the Confederation of Irish Industry newsletters that give a beautiful picture. I must pay tribute to them, they are the best lobbying group here. They are almost becoming a Department, more than a Department of State. They, in fact, mirror all the Departments of State and present very good figures. They have a rather coy notion about unemployment. It is about No. 6 in the table they presented in their recent newsletter. They suggest, for example, that it is terrible that unemployment is rising but they want no new taxation. At the same time they suggest that there should be the restoration of incentives within the Irish economy. It is beyond time that the investment pattern of Irish industry was examined. This highly cosseted Irish industry that has subsidised everything, subsidised trainees, machines, experts, has tax reliefs. They refer late in the evening to the Irish private sector walking around but I find it very difficult to discover what is private in it other than its aspirations and some of its consumption patterns. We need to know what their investments are. They have raucously told us over the years that they do not want the obligation of providing employment and they are the people who are foremost in the band of knocking when people say where the employment creation efforts must come from, the public sector, and knocking the semi-State bodies.

I want to be as positive as I can this evening. The motion speaks for everything I have to say, that a strategy for investment is needed. That has not been published by the Government or by other Governments. What investment is needed to meet specific employment targets? In relation to planning, I should like to state that it is not forecast. I will grow old in this House, and elsewhere, saying: "It is time we moved away from the weather economics that we have got accustomed to, the idea that if one says what one hopes will happen next year one has published a plan." That used to be, with the greatest of respect to the thoughtful person who sits in the opposite benches, a Fianna Fáil disease but it is, in fact, spreading through society. The idea was that when one announced what one would love to happen and broke it down by Christmases one had published a plan.

On income maintenance it is high time we realised the implications of this. As jobs disappear, and as people have no money to bring home, we need to face up to the reality of forming alternative means of distributing income. The long-term strategy, the technical one that is being neglected, is that in the year 2000 — in the next decade from now, or even before then — people will have to look at alternative means of distributing income across society. If there is no work for people, we cannot say that because there are no slots there one is not entitled to eat, sleep or participate in the consuming community of which one is a part.

I wish to refer to the families of the unemployed because this links with the last part of the motion "integrated dignified services being made available for those who have lost or who are seeking employment". Over 20 years ago an old teacher of mine who did not know much about economics said, "Do you not think that they could put a coat of paint on the unemployment exchange in Galway?". Twenty years afterwards the thought is still occurring to me. The cracked way that we deal with our unemployment problem is that we send all the people to draw their benefits for unemployment to one office. Then there is an open plan office which will register the people who need people to work for them. There are divisions between unemployment benefits and assistances on the one hand in one Department and manpower on the other. Who ever dreamed up this scheme? I want to pay every tribute to everyone working in those sections, but the idea of dividing where one goes for the consequential payments of what one gets when one loses a job from where one must traipse off where one might garner some hope is so nightmarish and so Keynesian that it screams to Heaven in 1983.

In relation to unemployment, I want the message to go to all members of the Cabinet that from my affairs with economics as a discipline I am well aware that this administration inherited difficulties. They are broken into three categories, the inflationary tendencies of the economy, the question of the deficit and the levels of unemployment. I am willing to acknowledge that the inflation rate has dropped and that deficit, even by the latest ESRI newsletter, looks like being on course for elimination. Lest we congratulate ourselves on those two dimensions we must remember that there is a way of making progress on those two dimensions of our economic problems and making the third dimension a great deal worse. The insane economic policies that prevail in the neighbouring island have reduced millions of people to the unemployment queues. The idea is that when one returns to efficiency one will do something about unemployment.

I make the plea for a mixed strategy in which we will be able to deal with questions of economic management and unemployment. I made suggestions before in this regard. There is a great deal of talk about spending money but there should be public accountability in relation to jobs. We need to bring in a dimension in our public accounts debates in both Houses of social accounting in which we will work out the implications for spending and for cuts in relation to job losses. It makes no sense, for example, like two bad tempered children at a children's party, for one child to say to the other, "You bought sweets you could not afford and now we are going to have no sweets as a result". The notion of saying that one can answer for indiscriminate borrowing and badly planned spending by saying that one is going to curtail borrowing in too quick a way and that one is simply going to cut back indiscrininately on spending are mad strategies that will provoke the unemployment problem.

I do not want it said that I have omitted the major event taking place in this city in relation to the whole question of Clondalkin, because I know other speakers may refer to it. That matter is being debated elsewhere and in several different fora but people who want to work should be facilitated in their desire to work. We are missing something in all our debates. This is a motion on unemployment or employment but in this month of November we should ask ourselves how long is it since we debated our industrial strategy. The core of our industrial strategy must be our job creation capacity. Beyond that question of our industrial strategy there is our social policy. The core of our social policy must be integrated services. On my way here every week I drive from Heuston Station and when passing an employment exchange I see crowds outside that exchange in the same conditions as there were 20 years ago. It is monstrous that we are operating our method of processing the unemployed in the way that the people who were the colonial masters of this country did. Every phase of the motion, the sources of unemployment, the consequences, appropriate short-term, medium-term and long-term responses, investment planning, income maintenance and integrated dignified services for the unemployed indicate a category of questions I want to hear replied to from the people who represent the larger parties in this State.

Mr. Smith

We debated a similar motion some months ago which I moved and then I asked everybody in the House to try to address the question from a non-political standpoint because it was too grave and too serious an issue for many people to be bandied about as a political football. It is fair to say that over the past number of years, particularly in the last ten years, there have been profound changes in the country. Neither the political system nor the administrative arm of Government has taken into account the phenomenal changes that have taken place in preparing for the future. I support Senator Higgins in his view that unless we are prepared to think of new and far-reaching radical solutions we are only going to be tricking around with this major national problem.

I indicated during that debate that even if inflation dropped, if our competiveness improved as a result and whatever other changes took place many of the companies would have reduced their work force and introduced new technologies with the result that even with a world improvement in trade it would be very unlikely that they would recall to their work force those who were displaced by the present recession. If we are to look at this on the basis of what has been the practice and experience up to now then this debate, the last one and future debates built on that premise, will be a waste of time and will do no service to us or the political system.

Forecasts available to us indicate that many of the jobs that exist today will be obsolete in a few years time. It is estimated that 50 per cent of the new jobs will come with developing technology by the end of the century. They are not known today, people cannot say precisely what they will be but it is known that many present methods will be obsolete. The continuing pressures to maintain existing jobs are enormous, not to talk about how we are to cope with finding jobs for such a huge proportion of our young population who are well educated and anxious and prepared to make their enthusiastic contribution to the nation.

I was somewhat disappointed not to hear more concrete proposals from the proposers of the motion. I accept that this problem requires continuing analysis but we need to be moving more rapidly into an area where our investment strategy, our industrial policy and our attitude towards the creation of new jobs take on new and much more radical dimensions.

I referred on the last occasion to the scandal of food imports. What has happened in recent months? The Shannon Free Airport Development Company establish a food development enterprise in Limerick and it is hoped that from that other opportunities will be found. However, the fact is that each day there are continuing pressures on existing processors. There is a reluctance on the part of some people in the food processing area to introduce new technology on advance marketing all over the country. This has left us with fewer people employed in that sector now than was the position when we debated a similar motion some months ago. I referred then to our forests which are maturing at a phenomenal rate and the fact that we are harvesting only one-third of that produce while at the same time we import 86 per cent of our timber needs. We are spending £350 million of cash we can ill afford on those imports although nothing is being done to harvest two-thirds of our maturing forests. The United Kingdom imports 75 per cent of its timber needs and that represents a gilt-edged opportunity for investment in our forests. I am not talking about Government investment. We have to broaden the scope of investment because some people think that governments have available to them funds which keep falling out of the sky. We have to encourage private investment and change our taxation system to encourage people to invest in enterprises and link private investment into Government investment in new enterprises of this kind.

It seems ridiculous that a person can have tax concessions for investing in gilt-edged securities which do not do anything in terms of creating jobs, the central core of the national problem. Lack of jobs is leading to criminality and the necessity to build more prisons and other so called solutions which I do not agree with. Nevertheless, the situation will become more difficult to handle in a climate where young people do not have ample job opportunities. The cost of trying to cure and cater for that developing young population keeps growing and we continue to subsidise or give greater incentives to people who use their spare capital for what I would call nonworking enterprises. I do not say that all that money is not used for or diverted ultimately into investment in jobs but I am satisfied that the vast bulk of the £450 million that is available for private investment does not go into job producing enterprises.

There was a lot of controversy during the summer about the different agencies that have come under the aegis of the Minister of State whom I again welcome back to the House. I brought to his notice during the last debate the fact that I was aware of a significant bureaucratic row developing in these agencies with regard to their responsibility and the competing nature of their work. My worst fears have been realised. I would not like in this debate to exaggerate these problems but the Minister should refer to them because there are two matters involved. Firstly, we argued that not all the funds available to the Government under the youth employment levy were being used for the purposes for which they were intended. I am not saying that there was a deliberate manipulation but it has become the practice under successive Governments to suck into the system new funds and gear them towards existing training facilities and organisations and not leave enough available for the purpose for which the fund was established. In this case it was to provide training and new employment opportunities for our young people. I should like also to ask the Minister whether or not the committee, which he said had been established at that time to deal with the allocation of these responsibilities, has reported to him. Will we have all these schemes on an even keel in the future and not have competition and national debate which in the long run are worthless and a waste of national effort? Considerable funds are available for these purposes.

I want to refer to the efforts to try to encourage young people, or any person with an entrepreneurial bent, to establish their own industry or business. There are a number of areas both in the tax code and now developing in our planning code which are acting as disincentives. It was brought to my notice recently that old business premises were being renovated for new small businesses and that our planning authorities insisted on planning and development charges because there was a change of use. In my home town of Roscrea three young people who are starting out had to borrow capital to try to get a little business going but they were faced with additional charges of this kind because there was a change of use involved. No more traffic will be generated and there will not be any significant increase in population in the area but we keep insisting on putting in small penal clauses of that type. People who are inclined to do something for themselves and have the kind of spirit which one would like to encourage throughout the country keep on saying that the Government in their traditional attitude towards work and in supporting systems that do not seem to be creating any wealth are very ready to pour in funds into that kind of situation but those who try to encourage the development of jobs face, in our tax and planning laws, instruments which act as disincentives. I should like to ask the Minister of State — it does not come under his responsibility — to talk to his colleague in the Department of the Environment to try to ensure that these anomalies which are developing in our planning laws are removed.

I referred earlier to the need for much more radical thinking in our attitude towards employment and new opportunities but we have to look to every possible means to encourage people to provide jobs, to get involved in processing and manufacturing and get involved in any way possible through community schemes even though they may only break even. It is far better to encourage people to do something than to spend something like £700 million as we do, unfortunately, in supporting families who are unemployed. It is better to be in a position to be able to make some of these payments to encourage people to do something for themselves.

Mr. Deenihan

I welcome this motion tabled on behalf of the Labour Party. Unemployment as far as I am concerned must be the most single pressing problem in our society at the moment and I am sure we all agree with this. The more debate the problem is afforded both in the Dáil and in this House the more awareness will be created in society of the desire of politicians to solve the problem and of the fact that solutions are being sought by all parties concerned.

As Senator Smith said, this problem is not that of just one party. It is the concern of all parties. It is in all our own interests to get together and try to offer solutions and remedies rather than going along specific party lines, appearing to criticise efforts being made by each other rather than putting all our efforts together. The unemployed population, and certainly the younger population, are looking to politicians to offer the solutions. They are depending on us, and certainly since the recent pay rises they are probably even more dependent on us to produce the goods. If we are not able to do that I dread the consequences for us all and for our system as well. These people are not going to accept politicians who fail to fulfil the promises they made with regard to the unemployment problem and other issues. Unemployment is always the most talked-about issue at election times, but when parties get into power they seen to avoid this problem. It is in our own interests to be aware of this and to try to get together and seek solutions together rather than as single parties.

I should like to congratulate the Minister of State, Deputy Birmingham, on his efforts. His honesty and his earnestness to offer remedies to solve the problem have appealed to the younger generation. In my constituency of North Kerry the recent schemes have had tremendous impact, and in a survey carried out on a personal basis I found there have been great benefits derived from the various schemes that have gone on there. Not alone have young people learned various building skills and so on but the communities have benefited enormously because these schemes are providing recreational facilities and other types of facilities like picnic areas and environmental facilities that previously did not exist. The spin-off from these schemes will have great impact, and those who criticise the schemes because they are short-term solutions should consider the impact they are having. We need long-term solutions, but certainly these schemes at the moment are having beneficial effects on our communities and I welcome them wholeheartedly. As somebody who has recently come into politics I can see that they are benefiting our society enormously.

There is a motion on the Order Paper in the names of Senator Ulick Burke and myself on the unemployment question and the Government's efforts at the moment in trying to solve the problem. As I will have more suggestions to make on that occasion I will be as brief as possible now. People are not inclined to admit and accept that unemployment as we have it today is something that is never going to be solved in toto. There is no doubt we will never reach the Utopian stage of having complete employment, and if we are trying to convince ourselves that this can happen — although it is a great socialist ideal — I think we are being hypocritical and unrealistic. What we should be striving for at the moment is trying to consolidate the jobs we have and to create enough jobs to meet the increase in population which in this country is quite enormous. Statistically, we have the fastest growing population in western Europe. To imagine that we can cut the unemployment population by half in any length of time is very unrealistic and way up in the air.

We have to accept we are going to have this problem and will continue to have it. We should be more aware of the educational facilities and the recreational facilities that are available to meet the needs and requirements of our people. If unemployment continues on the present scale, it is easy to foresee a situation arising where we will have more people unemployed than employed, and we can all realise the consequences of that type of situation and circumstances. Unless the people in the dole queues are educated and treated in a proper way our democracy and our whole system could be facing a major upheaval, and the new-found support for parties like The Workers' Party and Sinn Féin bears testimony to this. Unless we, the established parties, realise this and try to put forward suggestions for adequate recreation and education for these people on a larger scale than what we are doing at the moment, we are going to have very grave circumstances to deal with. As I said, I have a motion on unemployment on the Order Paper and I hope to have some personal suggestions and proposals on that occasion.

Mr. Kirwan

Less than two years ago I was elected Vice-President of the Irish Transport and General Workers' Union, the largest trade union in the State, organising one in every seven of the working population and arguably, in the context of the population it serves, the largest trade union in the world. Now that discipline has enabled me, perhaps more than anybody else in this Chamber, to come in daily contact with the trauma and the horrors of unemployment. That discipline has enabled me to meet on a daily basis men and women who have been disemployed by enterprises which gave secure employment not only to their parents but in many cases to their grandparents. When I was elected Vice-President it was of sufficient significance to the media that they sought to ask me some questions — not that my election was significant but the change in leadership was significant — and I recall saying to them that the two main issues which I faced as an officer of my union were the horrendous problem of unemployment and the concomitant need to maintain the real value of wages of those lucky enough to be at work in an inflationary situation that appeared never to end. Some eight months later — I have this penchant for promotion — I was elected general secretary of my organisation and, again, the media saw fit to ask me the same questions. It came to me like a cold douche that the replies were precisely the same; I still had these two major objectives ahead of me, the pursuit of the Holy Grail, the chase for a panacea for unemployment and the maintenance of real wages.

The twin evils of unemployment and the necessity to keep wages apace with inflation are really manifestations and evidence of the disintegration of the system under which we live. I do not think it has occurred to many people that capitalism is not a hoary or grey bearded child of the Greek democracies. It was spawned and spewed up by the industrial revolution when work was moved from the home, the farm, the village and the hamlets into the major urban centres to keep pace with developing techniques of mass production. This enabled private enterprise to sail merrily into the wind and soak from the system everything it could get and, at the same time, keep the level of wages and the general conditions of the workers who were then transferred to the major working centres at the lowest possible level.

We witnessed in that period, a short period in historical terms, the development of the multinationals who operate without any national conscience whatsoever. They, as the paramount and primary part of the private enterprise system, have littered the industrial countryside with monuments to their callousness and to their social inefficiency.

We have had the debacle of Ranks where we had a flour mill in almost every little village in the State but through a long process of rationalisation and technological development they reduced the number of mills to five or six and then, finally, like the Arab, they disappeared into the desert with all the socio-economic difficulties that entailed and engendered. We had the debacle of Dunlops, set in the south of the country in the second premier city, an employment that was regarded in Cork terms in much the same way as a Dublin man would regard employment in Guinness's brewery. Without a word they disappear over the horizon and leave families destitute, families who have given long service over three generations to that type of industry. We had Fieldcrest, another example of the efforts of private enterprise and the effects that come into high relief and play when they decide that the profit motive is no longer a dimension to warrant their staying there. We also have Clondalkin Paper Mills which is occupying the attention of almost every social, political and economic group you can mention.

What has happened with this virtual disintegration of the system, or at least the beginning of the disintegration of the system, is that we now have a Government who have adopted as their own, not the Thatcherite philosophy or the Reaganite philosophy — these are the products of Time magazine and Newsweek— but the old Victorian philosophy that the State has no function, no role to play, in the provision of employment for its citizens, that the State has no role or function in the maintenance of the dignity of the human person. That is the basis on which the Government operate today.

At this moment one-third of the youth of this country have been continuously out of work for more than six months and one-sixth have been unemployed for over a year. What a testimony to democratic Government. At the end of October we were told that the number of unemployed on the register was 199,600. The ESRI tell us in their forecasts that by next April that figure will have grown to 222,000, almost quarter of a million people unemployed in a little State that stands as an offshore island off an offshore island off the mainland of Europe.

To this you add the tremendous impact of technology to which private enterprise is wedded. For example, if you examine the latest statistics you will find that the two areas in which growth has been recorded are the chemical area and the engineering and metal area. There has been an increase in the volume of production by over 20 per cent and 11 per cent respectively. Notwithstanding that increase in the volume of production and despite it, the employment levels of these two sectors, the only two sectors that have shown a real increase in the volume of production, have been reduced by 4 per cent and 7 per cent respectively.

Nowadays in the search for a panacea for unemployment, we talk about work-sharing, we talk about sabbaticals. There was a time when I thought that referred to a religious community and as I grew up I discovered that it perhaps referred exclusively to the inhabitants of the halls of Academe.

Professor Dooge

I have not got a sabbatical yet.

Mr. Kirwan

Now it is down to the level of the guy who did not even wear a collar to work. They are now talking about him taking a sabbatical. There is also talk about the need to tighten our belts, by people who never knew a poor day in their lives. I will not mention them out of respect but certainly they are people who never knew what it was to be unemployed, who never knew what it was to be poor. They will stand up and will tell you to tighten your belt a notch or two while they go off to the Curragh, or while they buy penthouses in mid-town Manhattan. When they play poker games they play for stakes that are only a dream to me and certainly will never become a reality in real terms. These are the people who will tell you to tighten your belt.

The bell is tolling for this little State of ours. We may well witness the development of what appeared on the scene in the early fifties, when a little man with a black beret led the unemployed to a point where he successfully entered the House which I understand has greater seniority than this one. We may have a situation developing with a highly educated young population constantly unemployed, with no hope for the future and with absolutely no dream of attaining even the basic dignity of work and they may well organise in a way that my 39 years in the area of organisation has not even reached yet.

I listened carefully to Senator Deenihan talk about the socialist dream. Apparently amongst the economists of the world it is now socially acceptable that we have unemployment figures of 10, 12, 15 and 20 per cent. I was never enamoured of economists. I always remember the French professor from the Sorbonne who said that they constantly produced statistics somewhat like a bikini bathing suit: what they reveal is important but what they conceal is absolutely vital, and each views the problem from the perspective of his own particular hill. I can recall an honoured Member of this House, an eminent economist, and with respect to Senator Dooge another product of the halls of Academe, producing an economic plan which is now argued on this side of the House as being the root cause of our disaster. I wonder if the only sane people in this community are those who are unemployed. They know what their mission in life is, they know that they are seeking employment. I would remind my comrade Senator that the eastern bloc operates a form of government of which I am no devotee. I travelled in that area on a few occasions, and if I were given a choice today to accept their system, or the American system, with all its warts I would probably accept the American system. At least it enables me to do what I am doing now — speaking my mind. However, I would draw the Senator's attention to the fact that with all its difficulties, when viewed in western terms, the eastern bloc system has, at least, managed to ensure that the most lowly citizen within its borders is employed.

I would also draw the Senator's attention to the fact that we have escaped Armageddon in respect of our unemployment problem because of the sagacity — modesty forbids me from mentioning names, I will leave that to your own knowledge — of some Deputies who became Ministers and who had the wit to introduce cushioning mechanisms to deal with redundancies and social welfare. As long as you can maintain those benefits at the level consistent with human dignity you can stave off this Armageddon. To this Government and previous governments I say, it is not enough to sit down with the trade union movement and all the other socially committed groups to tackle the problem of unemployment. There is an ideological basis for these discussions and there has to be an acceptance on the part of this Government that their primary function is to provide the people with the dignity of work.

Mr. Lanigan

This debate gives the House an opportunity to concentrate on the major problem that is facing the country today, the current problem of unemployment and what we should do about it. The current unemployment figures, and more especially the seasonally-adjusted rise in unemployment trends, must give everyone in the community a major and continuing cause for worry. There must be a full realisation by everyone in the community that this is not a time for political point scoring but rather it is a time for a serious look at our current attitudes in the areas of wealth production and wealth distribution and, equally, our attitudes as a community in the major areas of education and, in particular, in our social attitudes towards those people who are unemployed and who may become unemployed in the future.

The unemployment figures, as a blunt statistic, hide some of the factors. We have had a series of factors causing the rise in unemployment: we have had the effects of the world recession; we have had a loss of competitiveness in the Irish economy, and of course, we have the huge increase in the Irish workforce, which is, at present, increasing by over 15,000 each year over the number of people leaving the labour force on retirement, marriage, or for other reasons. This will be a continuing process. The total Irish labour force is expected to grow from a level of 1.23 million in 1979 to 1.41 million in 1991. The growth in the labour force will be concentrated in the 15 to 44 age group, with the labour force aged under 25 growing to a very considerable extent by 1991. We must conclude that the rise in both youth and general unemployment has been due to population growth to a greater extent and actual decline in total employment to a lesser extent than in most European economies.

Other European economies are suffering at present from an excess supply of young people on the labour market but this excess is expected to peter out in most European countries by the mid-1980s, contrasting with Ireland's high birth rate. This high birth rate creates many problems for all the elements who are involved in job creation and job maintenance. We will have to create an ever-increasing number of new jobs just to hold our unemployment level steady due to our increasing overall numbers looking for employment.

It is also becoming increasingly more obvious that new technology and work methods will ensure that even though we may have an upsurge in economic activity and growth it does not necessarily follow that we will be able to absorb all our school leavers into jobs. It is true that there are signs that the world recession is now lifting, and this is very noticeable in the major economic power blocs. The lifting of the recession, however, will not necessarily mean that we will be able to participate in the improvement. We will, at least, have to improve our competitive position. We will have to ensure that our industrial costs do not increase any further in terms of wage costs, production costs and our inflation-related costs, particularly as they apply to home-created inflation.

The Government play a major role in the areas mentioned. There is no doubt that the recent increases in VAT rates, in PRSI and income-related levies, and the increase in revenue from various items, particularly from beer, spirits, tobacco and petroleum products, have increased our inflation rate. A serious doubt is raised as to whether these increases have done anything else but increase our cost of living, with a resultant increase in unemployment in many industries.

High interest rates have also played a major part in the problems of industry, and the industrial development agencies have had to contend with trying to cope with the recession and the struggle to maintain jobs. The current situation in the employment front is that in the first six months of this year employment was reduced by 21.5 per cent as opposed to a reduction of 9 per cent between 1981 and 1982. This shows the major problem we face as we try to stem this tide of unemployment.

It is easy to look at the situation at present and find oneself getting more and more despondent but this is not a time for wallowing in despondency. Rather is it a time for looking at ourselves critically and attempting to eliminate as many as possible of the deterrents we create at home for the growth and continuity of a healthy job creation and maintenance policy.

The Government, trade unions, farmers, industrialists, educationalists and the self-employed — be they professional or otherwise — have a major role to play in attempting to create a favourable atmosphere for further job creation. We must identify areas which will give us the basis for sustained economic growth which will result in the creation of a greater volume of employment. First, we must increase infrastructural investment and eliminate transport and communication bottlenecks which do not help at all in our quest for industrial progress. We must ensure that agricultural enterprises, whether they be on the farm or in industries based on agricultural products, are planned and capitalised properly and that the proper research, development and marketing strategies are adopted. We must, because of the cost of imported energy, attempt to restrain the growth of energy-intensive industries and spur the development of strategic industries with low-energy intensity.

Production technology and management will have to be upgraded to offset rising labour costs, while labour-intensive industries will have to be encouraged to automate their production processes and to attain economies of scale. To provide the highly skilled manpower needed for this restructuring, educational institutes will have to place even greater emphasis on science and technology. The strategic industries should be in the areas of agriculture, high technology manufacturing and information dissemination by virtue of their linkage effect, technology intensiveness, low energy consumption, high added value, good market potential and low rate of pollution. Their development should speed the type of industrial restructuring that is essential to the long-term growth of Ireland's economy.

The spectre of long-term unemployment looms over more and more of our country's young people and, unfortunately, we are not alone in this predicament. If we were an isolated case our young people could use their skills abroad, but in almost every country in the world the number of unemployed young people is growing. It has been stated that the trend towards long-term unemployment could perpetuate itself. Employers do not like applicants who have been on the dole for a long time because they probably have been rejected before and the employer reduces his chances of recruiting incompetents if he accepts only those who have been out of work for a short time. Those who have been on the dole for a long time have probably forgotten their skills and their productivity may be lower. They may have suffered more lasting damage, such as loss of motivation or their ability to work as a team. Young people are particularly vulnerable to this as their unemployment rate is higher than the adult rate. It is felt that unless governments decide to make temporary job schemes for the young people into semipermanent schemes, more young people will be caught in the trap of long-term unemployment. If this is not done when unemployment begins to fall, they will be left behind, unemployed, unemployable and very angry.

Our major priority in terms of education should be to evaluate the educational system that has grown up here over the years. A recent conference of Ministers for Education in Dublin suggested that there was a general feeling of alienation among students, due to the absence of motivation in schools, apparent lack of relevance to the curriculum and a prospect of prolonged unemployment leading young people to truancy, violence, juvenile delinquency, alcoholism and drug abuse. Ideally, the schools should provide a grounding in the basic skills necessary for everyday living. One of the chief objectives of compulsory secondary education should be to prepare people for the vocational and personal choices that will have to be made during the crucial period of their lives. The curriculum should also include political topics of everyday application, such as health consumer education, and it should cover such areas as media education and the environment.

What we must do, therefore, is to draw up specific social and economic policies to stimulate employment. Two major weapons are available: the development and improvement of vocational training and the reduction of working hours. The need for vocational training, both before starting work and during it, is universally accepted. School systems must have more contact with the world of work and its problems, leading to co-relation between young people's qualifications and the jobs open to them. The training provided should also always combine theoretical and practical experience, but increasing emphasis being placed on the latter.

We must also develop throughout working life in-service training, which is the only way to adapt to technological change. We in Ireland have got to grasp the nettle and get down to the huge task of changing our attitudes to education and work. If we can do that we can survive in the economic circumstances of the world today. We have a very young and well educated population, and we can harness these young people's energies if as a nation we forget our outdated prejudices towards manufacturing industry.

Most of the people who speak about the problems of the work force today and the problems of unemployment concentrate mainly on the young well-educated population. There is, however, another area that we must have a concentrated look at, and that is the number of people who are 35 years and over who have lost jobs in the last couple of years. There is absolutely no doubt that these people will not be able to get back into the work force as easily as young people who have been educated to a higher degree.

The situation for a man of 40 years of age who had been working in a traditional type industry over many years who finds himself on the dole queue is much more severe than for a young person who is well educated in today's terms, who finds himself without work but who can adapt to training within the next few years.

It must be said by all parties, whether they be on the side of government, in the industrial side as employers or employees, that there has been a total lack of commitment to an agricultural policy which would have been able to increase our employment potential. We can see numerous cases in which, through lack of planning, jobs have been lost or jobs have not been created in the agricultural area.

A major effort should be made in the high technology area. We in Ireland can benefit because we have an educational system which is changing gradually and which is providing through the NIHE and the regional colleges a system which has changed the educational status of Ireland. Wherever you travel in the world you will note that it is the new industries which are creating new employment and that jobs are being lost in traditional industries.

Senator Kirwan said we have a special problem because a third of the people under 25 years of age are unemployed. The latest statistic I have seen is that 25 per cent of those under 25 and employable are unemployed. That is a high rate. The statistics appeared on last week's Economist. I do not believe everything in the Economist but one must take note of it. Every other country in Europe has a higher rate of unemployment of people over or under 25 years than Ireland's 25 per cent.

There is a chance for young people, and we must accept that it is this 25 per cent that we are going after. There is no point in anybody getting up here and suggesting to young people that there is no future for them here. I am fed up listening to it. There is a future for them, but the Government and the employers and the employees themselves must grasp the nettle. I have been in business for a long number of years and I have seen a deterioration in my own business in the last couple of years. Some of it might be due to the fact that I am here in the Seanad more often than I am at my own business but the major deterrent to anybody in a small business at present is the rate of taxation that is put on employment. There is no way that an Irish employer can make a profit in a legitimate business if 23 per cent, at least, of his turnover goes directly to the Government, and the collection fees for that have to be met by the employer — 11.61 per cent of his wages goes directly to the Government. No country in the world has an 11.61 per cent tax on employment. How can anybody suggest that in the future we are going to create new employment if there is an 11.61 per cent tax? One per cent of that goes to a health levy, 1 per cent is to the Youth Employment Agency and there is another 1 per cent for another levy. The tax overheads placed on employers are a mess.

The situation can be retrieved by using our natural resources as they should be used. There should be a realisation that we have a resource in our young people. We equally have a resource in the people who are not so young, and they should not be written off, but we have a special commitment to the young people, but we have to have a commitment to everybody, whether they be young or old.

The motion notes the continuing increase in unemployment. It reads like the next item that we will be dealing with in this House, the 21st Report on EEC Developments. In every one of the 21 reports we are noting things, we are identifying things, we are supposed to be dealing with the problems. We are identifying the problems but are we dealing with them?

We will see that the prophecy of the 21st Report is one of failure. There is no doubt that the EEC is failing because member states continue to note only. Noting something is not a panacea for anything: it simply means that you write it down and you take a note of it or lose it or forget it.

What we need from the Government is a commitment to employment, a commitment to the youth of the country, and equally a commitment to the people who are on social welfare benefits. We need a commitment to encourage employers to come back into the employment business; to encourage those who have jobs to stay in the jobs. Short-term working at present pays somebody who is married with children because he will get more on short time than he will when he is working in many cases because he will get his taxes back and he gets full benefit while he is on his short week, though from the social welfare benefit angle he cannot get more than 85 per cent of his salary. But he gets his tax back, and in a particular week he can often earn more the week he is off than the week he is not off.

The Government must give the lead, reduce the disincentives to employ people, encourage the incentive to work and ensure that those out of work have at least a level of income which sustains them during their period out of work.

Mr. O'Leary

I note what Senator Lanigan has said, that noting the unemployment problem will not solve it. Equally we will not solve it if we congratulate or condemn because anything we say here can only create the climate which will help the Government, public representatives in general and the people at large to solve the problem. Our purpose in discussing these matters is to create the right climate. That is the spirit in which I rise in this debate for a short contribution.

I should like to refer first of all to the nature of unemployment. It has been analysed correctly by Senator Higgins as being partly recession-based and partly structural. We have not given sufficient attention to the difference between these two causes of unemployment.

It is very hard to assess accurately the breakdown in employment and growth in unemployment. It is true to say that the growth in unemployment in Ireland over the last few years has coincided with a period when our national gross product has been virtually steady or has changed very little — there has been a marginal decrease in some years and a marginal increase in other years. The actual gross national product, the goods we produce, has remained constant during the time when our unemployment increased from 80,000 to 199,000. In relation to what I am going to say, that is important, because we are now coming to a time when we cannot manage the economy to provide the people with the essential jobs in a no growth situation. It shows a failure of our operation of the system. It is a failure to recognise the importance of distributing the wealth of the community in a proper fashion.

The basic unemployment or unemployable figure of 60,000 in Ireland has been increased over a period of years to perhaps 80,000 by a sequence of events. The recession has cost something in the order of 58,000 jobs, while the increase in population over the last four or five years probably added to the unemployment figure about 60,000 jobs. So we have two problems. First there is the problem of structural growth, the growth in our population, particularly in the growth in the number of young people, more coming into the employment area than are leaving at the other end. We have two problems associated with changing volume in the employment area and changing work practices which make up the other 60,000 who are now in our unemployment figure of 200,000.

The two areas are the reduced level of activity because fewer goods are being sold, and there is not the 3 to 4 per cent increase in our gross national product which we had come to expect right throughout the sixties and indeed throught most of the seventies. The other is a change which is based on new technology. I do not think we should underestimate the importance of this in the growth of unemployment, particularly in unemployment of educated young people in the last few years.

The reduced level of recruitment in two industries, insurance and banking, has made a very significant contribution to reducing the job prospects of those who got a good leaving certificate and who did not want to go on to any further education. Their prospects have been seriously damaged, because, number one the insurance industry has gone into the process of mechanisation and is no longer taking many people on; and the banking industry is in the course of a most fundamental revolution. These are just indicators of the effect which the microchip will have on the population at large.

There also has been an inadequate examination of the effect of continuing work after marriage in respect of the female members of the workforce. That is a proper situation and it is a permanent situation. It is not reversible. It is here. In my opinion it is proper, but whether you think it is right or wrong it is here and will not be changed. That is why we can have the peculiar situation that the number of people unemployed is increasing substantially and the number of people at work is increasing, the reason being, of course, that a greater number of people are available for work, even a greater number than the natural increase in our increasing population has brought about.

The fundamental change in the structure of our labour force brought about by the restoring to normality of the concept of work for women after marriage, which I do not think is adequately taken into account in considering the size of the problem, has been correctly identified by a number of speakers. We are in danger of developing two nations.

We have an increasingly prosperous country where the gross national product over a period of nine years has been increasing. If that is so, and if there is a substantial number of people unemployed, it must mean that those at work are becoming increasingly prosperous — I am talking about this year in comparison with last year with the year before. I am talking about a period. Those at work are becoming increasingly prosperous because very often there are two incomes in the same family.

We have the problem of those at work becoming increasingly prosperous supporting those who are out of work. They can be divided into two sub-categories, those who because of their social conditions are satisfied not to be at work — the old and those who do not require work. The real dangerous sector and the sector that we owe a great responsibility to are the young and middle aged who want to be at work and who are disadvantaged by not being allowed to work. Their standard of living is being depressed by the fact that they are not at work, and they feel alienated by society. I was amused by Senator Kirwan's references to the involvement of the trade union movement. The biggest coalition that we have in this country today is not the Coalition between Fianna Fáil and Fine Gael — that is minor ——

An Leas-Chathaoirleach

I beg your pardon.

Mr. O'Leary

I am sorry, Fine Gael and Labour. I think it is not your business to correct me if I made a mistake.

An Leas-Chathaoirleach

You should respect the Chair. You made such an arch mistake that I could not but intervene.

Mr. O'Leary

I respect the Chair absolutely. I know why you interjected. I do not agree with it: I do not think the biggest coalition we have in this country is the one between the two Government parties, Fine Gael and Labour. I think the biggest coalition is between those who own and manage industry, those who own and manage companies and work in them, that section of the population who are becoming increasingly prosperous. There is an identity of interests between the owners of industry and those who work and the trade unions that represent them.

I do not believe that the trade unions are representing the unemployed. Not at all. Once a man or a woman becomes unemployed, the trade unions lose interest in that person. There is a coalition between those at work. We who are at work, and I am part of it, are in my opinion not paying sufficient attention to those who are not at work. We are grabbing an increasing portion of the national cake for ourselves and depressing the standard of living of those who are not at work.

Of course, this calls for Government action. Government action can only take place against the background of a population that will wear the kind of measures that are necessary. I am not against the Government starting up new industries but I want the Government to start up new industries which will give the prospect of secure employment over a long number of years. I want to restore the situation when Governments took substantial initiatives in the past by establishing firms such as Cómhlucht Siúicre Éireann. These new initiatives are necessary, and I favour the Government in this respect and no ideological hang-up of mine would stand in the way of the creation of worthwhile employment in this regard.

But where are the new ideas? Who is identifying what the Government should do? Those who believe in the capitalist analysis are merely saying we should improve the present system while those who believe in the socialist analysis are by and large saying we should nationalise this, that or the other thing. But we do not want to nationalise something — we want to create new kinds of employment, and very few of us, myself included, are coming up with the new ideas for extra jobs, whether they be in the private or public domain.

The job we have to do is to explain to the people that we must tackle the problem on the basis of increasing the number of jobs available and allowing the Government take action. For example, to suggest work sharing in a way which would reduce the standard of living of those who work and transfer it to those who newly arrive on the work scene is not realistic because we talk about the sharing of work at the same standard of living as those who are employed at present.

Mr. Lanigan

Could the Senator identify the workers who are getting an increasing share of the national cake, because I do not know of any worker at present who is getting a reasonable share? There has been a total erosion in the last couple of years and I have not seen any group who are employers or employees who are getting an increased share of the national cake.

Mr. O'Leary

Senator Lanigan is not taking into account the circumstances over a period of years — he is speaking of this year compared with last year compared with the year before. If you view the situation over a period of years and if you ask a person who is in secure employment at the present time — for example, a person working in a Government service job — whether he is in a better position than he was ten years ago, if you take a long view of the circumstances, of course his standard of living is substantially higher than it was a few years ago. If we do not view these problems from a long viewpoint we will not see the significance of the problem.

Mr. Lanigan

When I pay the few people I have working for me, when I think of where the money is going to come from——

Mr. O'Leary

It was good of Senator Lanigan to speak for his quarter of an hour and of me not to interrupt him, and he should allow me the same courtesy. Senator Lanigan obviously does not recognise that there has been a fundamental change in the way in which short-time remuneration has been calculated and, second, he is erroneous in thinking that the Irish social costs at 11.61 per cent are anything like as high as they are in other countries in the western world, where they can be as high as 40 per cent, even 50 per cent of a person's salary.

Against that background, I have to say to us all, not only to the Government side and the Opposition side but to the people at large, that if we do not fundamentally examine the basic problem, which is that those who are at work are almost shutting out and forgetting about those who are not at work, and unless we take the steps which are logical to bring the two nations which are developing to a conclusion, I do not think we will be doing anything towards solving the basic structure of the problem in the employment area which we have.

Minister of State at the Department of Labour (Mr. G. Birmingham)

In responding to this motion on unemployment I should like to stress at the outset that the Government's economic strategies have clear and emphatic social objectives, namely, the creation of conditions by which employment will be available for our people, and the protection of the weaker sections of our community.

The motion refers to identifying the sources of unemployment. There are, in brief, four major causes of our present unemployment difficulties — the international recession, the increase in our labour force, the decrease in our competitiveness through increases in unit costs, and the constraints placed by the public finances on our capacity to finance job creation measures.

The effects of the international recession can be understood by referring to the EEC. Unemployment in the EEC has risen in a virtually unbroken sequence each year since 1972. The difficulties of the early and mid-seventies were aggravated by the second oil price shock of the late seventies. Most western countries are now in the fourth year of low or negative growth accompanied by steady rises in unemployment. As a small open trading economy Ireland cannot isolate itself from the impact of the international recession. Indeed the continued downturn in aggregate economic activity has exerted severe pressure on employment, and the present level of unemployment remains the starkest reminder of our economic difficulties.

At present the numbers registered as unemployed stand close to 200,000, more than double the level obtaining in January 1980 when the recession first started to show up in the unemployment figures. There are some signs, however, that the pace of the rise in unemployment may be decelerating. Since May of this year, seasonally adjusted unemployment has been rising at fewer than 2,000 per month. In the previous 12 months, the rate of increase had been about twice as high.

Indeed, an evaluation of the statistics released by the Central Statistics Office relating to the period mid-December 1982 to mid-April of this year indicates that despite the growing size of the live register large numbers of job seekers do in fact secure employment. During these 17 weeks under review the number of unemployed rose by almost 18,000. However, about 66,000 new persons registered with the employment exchanges while 48,000 left it. While these figures illustrate that unemployment in one form or another affects many more people than is commonly supposed they also suggest that while people lose jobs, even in a recession, people are able to secure employment and are doing so in large numbers.

The second major contributor to our difficult unemployment situation is the average increase taking place in our labour force. This can be measured relatively accurately — those who will enter the labour force as first time job seekers in 1998 are already born. In addition, there are the numbers who return to work after leaving the labour force for a period. A best estimate of the annual labour force increase in the period up to the mid-nineties would range between 18,000 and 20,000 persons.

It is, therefore, necessary, just to maintain unemployment at its present level, to increase the number of available jobs by between 18,000 and 20,000 per annum. This has got to be done against the background of a continuous decrease in total employment in agriculture and, more recently, in manufacturing and job losses in all sectors of the economy.

The third reason for the increase in unemployment is the relative worsening of our competitiveness. I would emphasise that this loss of competitiveness is attributable to more than increases in wages and salaries and unit labour costs. It is attributable to management factors, the skills and attitudes of our workforce, the level of taxation that must exist to re-pay the capital and interest on our loans, and the high cost of a number of public services.

Having said this, I must, however, refer to recent wage increases. In the 23rd round of pay settlements most firms and employers settled for what they could afford. A major question mark however hangs over some agreements which were concluded, in relation to their effect on employment, particularly in the more vulnerable sectors and industries which are primarily dependent on the domestic rather than on the export market for their survival. It can be said with some justification that there were instances of indiscipline and unwise capitulation on the part of the employers, which unfortunately, ultimately may have damaging effects on employment levels in certain sectors.

The fourth contributing factor to increases in unemployment is the state of the public finances. In brief, we have not got the resources to expand the economy or finance the type of job creation measures we would like. Our borrowing in 1982 represented more than 20 per cent of our gross national product.

Having outlined the background to our problems, I would now like to outline the short, medium and long-term responses. Sustained economic growth is an absolute prerequisite to reversing the trends in unemployment. At international level the Organisation for Economic Co-Operation and Development have in their current "Employment Outlook", commented that recovery is now under way, but they caution that an upturn does not seem likely to make inroads into unemployment for some time and even when it does, a sizeable unemployment problem will remain, particularly in Europe. Both the Taoiseach and Tánaiste recently indicated that the prospects of domestic economic recovery are reasonably good and encouraging.

The stabilisation of world inflation rates at lower levels, and in particular the favourable developments in the cost of imported energy products, give solid grounds for expecting a further fall in inflation in Ireland in 1984 down towards traditional levels. There has also been a significant improvement in the balance of payments deficit. In regard to the state of the public finances, while there is still a long way to go in restoring control over taxation, expenditure and borrowing, a lot has already been achieved. The broadest measure of official borrowing is the public sector borrowing requirement. This reached almost 22 per cent of our GNP in 1981, fell to 21 per cent in 1982 and may be no more than 17 per cent in 1983. This is a considerable improvement in a short space of time, and suggests that this Government's policies, however difficult they may be, are clearly having a beneficial effect on the overall state of the economy. The public sector borrowing requirement is a major determinant of Government activity, and that bottom line has already improved sharply. For the first time in many years the Government will be able to meet their broad overall budgetary targets.

Despite the improvement in the public finances, our capacity to pursue expansionary economic policies and stimulate domestic demand at this time, however, remains severely limited. The burden of achieving the required growth in the economy must rest in the main on the future expansion of our exports and on external factors.

In this connection it is, however, more essential than ever that the search for self-sustaining employment is undertaken against the backdrop of appropriate economic planning and management, and this is a central element of Government policy.

To this end the Government established permanent structures at the beginning of the year. The National Planning Board, composed of a small number of experts of high national repute in different economic and social policy areas, are working on a draft medium-term plan for the economy which will provide essential frameworks within which short-term economic and social planning will proceed. The plan is scheduled to be ready for submission to the Government in April next year.

Within the framework of the Sectoral Development Committee, the existing system of sectoral committees for different areas of economic activity is being extended to ensure that each industrial sector is planned in accordance with a long-term strategy in order to realise its full potential. Already over two-thirds of industry is being subjected to this analytical process. Reports on the first two sectors, clothing and textiles and mechanical engineering, have now been produced, which set out a whole range of measures to be taken to stimulate expansion and employment in these areas. Furthere reports on the electonics, beef, marketing, chemicals and pharmaceuticals, plastics, fishing, construction and dairy industries will follow shortly.

Finally, the Cabinet Task Force on Employment, comprised of key economic Ministers, has been meeting regularly with a brief to identify measures that can be implemented in the short-term to alleviate the unemployment situation. The White Paper on Industrial Policy, which will chart the course of our industrial development and job creation efforts over the rest of the decade, will shortly be put before the Government. Senator Higgins in his contribution addressed himself to the need to consider our industrial strategy and that is happening. Many other measures, including the many elements of a work sharing package, have been considered by the Cabinet Task Force and appropriate action initiated.

The Government are committed to consultations with the main interest groups. The Taoiseach has arranged meetings with all the main representative bodies to discuss the public finances, the economic outlook in the medium-term and the options open to us especially in relation to the problem of unemployment. It is clear that similar consultations may be necessary on the development of pay policy. I believe such discussions should take place well in advance of the next wage round and might aim at achieving a broad consensus on the level of increases in incomes which may be compatible with an improvement in the employment situation and which are sought by the Government and indeed by the social partners.

A central element in our strategy is to improve the industrial base of the country.

Throughout the recession the Industrial Development Authority have been striving to maintain the momentum of new investment and have been giving a continuous and ever-increasing commitment to attracting new employment-creating industries to Ireland, as well as fostering the development of home-based industries and small businesses. In 1982, the IDA approved a high number of investment projects from foreign and domestic sources. Up to £260 million in grant assistance was committed to nearly 1,000 investment proposals, the promoters of which plan to invest a further £320 million, bringing the total investment to £580 million. If the projects come to full fruition as planned, the associated jobs would be in the region of 26,200. I acknowledge that because of market changes and company circumstances, all stages of the various proposals may not proceed as planned. There is nevertheless still a large number of jobs to come on stream over the next few years.

As regards actual job creation on the ground, an estimated 10,000 first time new jobs were created and filled in IDA-backed industrial projects in 1982. With regard to overseas industries the IDA, since the early seventies, have been concentrating on the attraction to Ireland of high technology, high growth industries such as electronics, health care and chemicals which could be successfully developed here. This policy has brought great benefits to this country in the form of employment and export earnings, and continues to be an integral part of the IDA strategy for creating future employment opportunities.

The IDA are also actively pursuing a policy for the development of our existing domestic industrial base. A major part of this effort is directed towards the development of small native industries.

In addition to the international economic situation and getting our own economic and financial house in order, the Government are implementing a number of selective employment and manpower measures. These include training, experience programmes and temporary job creation schemes. These programmes have, of course, economic objectives such as improving the quality of our labour force and increasing competitiveness. They are also, however, person centred. They recognise the dignity of the individual and improve his chances of getting a worthwhile job — and let it be said that most of our people do get and have worthwhile jobs. Such schemes are preferable to unemployment. They also help to distribute the burden of unemployment more equitably and lessen the impact on certain groups such as young people, who have been particularly affected by the rise in unemployment. Senator Lanigan graciously acknowledged the relative success that has been enjoyed in that area.

The National Manpower Service, who operate nationwide through a network of more than 40 offices, are concentrating their efforts on helping unemployed persons, those on the live register, and young people looking for their first job, to find employment. Particular attention is being paid to those who have been unemployed for six months or longer. Liaison arrangements between the Manpower Service and Employment Exchanges of the Department of Social Welfare have been considerably strengthened. The relationship between those bodies was subject to some comments from Senator Higgins and I will be returning to it later.

In today's economic climate the provision of adequate training for our workforce is vital. Companies with a well-trained workforce and the individual with skills are both best able to weather the storm of economic recession and to take advantage of an upturn in economic activity. In recognition of this the funds made available to AnCO were significantly increased this year and, with the additional grants available to them from the European Social Fund. AnCO have a 1983 total budget of £87 million, over £25 million more than in 1982. With these resources the authority expect to train 34,000 this year. Over 27,000 of those trained will be under 25 years, many of whom will be seeking their first jobs. While the placement rate of AnCO trainees varies according to programme, in general it is about 66 per cent and is a clear indication that people with the right skills and proper training have better prospects of obtaining jobs. AnCO are concerned that they give unemployed persons the best help possible and take the time to advise applicants, through their selection/testing service, of the most suitable courses for them.

Like many other countries, the rise in unemployment in Ireland has fallen disproportionately on youth. In 1982, the numbers on the Live Register under 25 years of age increased by 38 per cent compared with 23 per cent for those over 25 years of age. The corresponding increases for the first ten months of this year have been 11.6 per cent and 8.1 per cent respectively and the under-25s now represent 30.7 per cent of the total register.

Against this background of youth unemployment and the projected forecasts for labour force growth, the Government in their previous term of office established the Youth Employment Agency, with a brief to bring about a united and concerted approach to training, work experience and educational measures designed to tackle this problem.

The introduction of the youth employment levy in April, 1982 has enabled expenditure to be increased substantially on youth employment, training and work experience from £19 million in 1981 to over £32 million in 1982 and an estimated £77 million in 1983. Senator Smith expressed concern that some of that fund might have been diverted for purposes other than those for which it was intended. Let me state emphatically that every single penny of the levy will be spent on youth employment and training.

Participation in the major youth employment and training schemes has risen, as a consequence of the additional funding, from 22,500 in 1981 to 33,000 in 1982. In 1983, it is anticipated that 50,000 young people will participate in schemes and operations funded from the proceeds of the youth employment levy. This is broadly equivalent to the number of young people who leave school each year and do not continue on to third-level education. The scale of programmes following the rapid expansion since 1981 is now such that all school leavers, if necessary, can be offered an employment, training or work experience opportunity.

Senator Ferris expressed concern that it has been suggested that some abuses have crept into the system. I would like to assure him that the Government share that concern and have already taken action to root out those abuses. Fears have been expressed that there might have been an element of rotation in the work experience programme, with employers taking on people and then letting them go. This has been tackled, and it will not be a feature in future.

An estimated 21,000 young people, who are registered as unemployed, have been out of work for six months or more. The Youth Employment Agency have recognised the need to give priority access for this group to the range of training, work experience and employment schemes provided for young people generally. Senator Lanigan indicated why that should be so. Disadvantaged young people are a priority with the agency.

The agency launched a number of innovative employment programmes in 1983, particularly the Community and Youth Enterprise Programme and the Loan Guarantee Scheme. A Community Managed Integrated Programme for Young People involving the setting up of Community Training and Employment Consortia (COMTECs) is at present under consideration.

The Community and Youth Enterprise Programme, which was launched last June, is a potentially significant contribution to the creation of economically sustainable employment. It is being presented by the agency as a means of unlocking a hitherto unexploited potential for job creation. In this, as in other areas, the agency have, as a matter of policy, decided to engage only in activities which complement, rather than compete with, the activities of other bodies. Under this programme the agency will fund the employment, by local groups with an approved project, of a community enterprise worker for a set period to help to assess the viability of the project.

Before I depart from this area of the community's role in employment creation, it is appropriate that I should ask Senators to play their part in drawing the opportunities that are available to the attention of their own communities and constituents. It is an area that has, in the past, been neglected. It is an area where things are happening in regard to, for example, the Southill Development Association. Southill is the largest housing estate in Limerick city, comprised of 1,200 houses built in the late sixties and early seventies. It is an area that has experienced all of the problems that we associate with similar urban development. Local people recognised the problem, came together and determined to do something about it. As a result there are now items being produced locally such as security screens, wrought iron products, wooden toys and games and there are 13 people from the Southill area employed. In addition, ten other people, mainly housewives, are employed part-time. All of the people involved are from the Southill area, most of them possessing primary education only.

Senator Smith would be better aware than I am of the activities of the Slieve Phelim Community Co-op in Tipperary — a co-operative formed to try to arrest the decline in a hill area. People came together because they saw a need for efforts of this kind, and the effect of their initiative is to be seen with 25 people directly employed as a result of their activity. We could give other examples as well. For example, in Kilmore Quay, County Wexford, 120 fishermen came together to erect their own fish processing unit. In Granard, County Longford, a development company was formed with local shareholders to buy a disused cinema and provide its own industry. Today that premises, once a derelict cinema, houses a furniture project. I mention those examples to indicate what can be done when a local community determine to do something for themselves, in the hope that in those areas where we have not yet seen initiatives Senators can give a lead and if necessary draw in on those or other examples.

As I indicated, the Community and Youth Enterprise Programme launched last June is a potentially significant contribution to the creation of economically sustainable employment. In recognition of the fact that individuals and small local projects often face difficulties in obtaining access to loan finance for small amounts of working capital, the Youth Employment Agency are developing a Loan Guarantee Scheme which would involve in part-guaranteeing bank loans to such projects. Under this scheme the agency recently launched the Youth Self Employment Programme, which involves them in going guarantor for 60 per cent of loans of up to £3,000 to young people with a sound business idea.

The agency propose to establish, in the near future, six demonstration projects at community level, which will integrate the activities of the education, training, recruitment and job creation agencies and local authorities. The projects are based on the setting up of Community Training and Employment Consortia — COMTECs. The COMTECs, which will be representative of all local manpower and community interests, involve a radical new approach to the youth unemployment problem. It also addresses itself to the concern expressed by Senator Smith about the level of co-ordination in the various agencies in the field.

It is now generally accepted that traditional job creation programmes alone will not solve the present serious unemployment situation facing very many countries. Much could be done at local level to encourage local initiatives in employment creation. This would entail both self-employment and the creation of jobs by communities themselves. Many countries see worthwhile opportunities being created in this way. The Organisation for Economic Co-Operation and Development have introduced a programme on local employment initiatives, and this country is one of over 20 countries participating in it. The participation of countries like Japan, Canada and the US, together with the European Economic Community, emphasises the importance being placed on local initiatives.

Local initiatives in Ireland will be stimulated through the proposed enterprise allowance scheme, the introduction of which the Government have approved on a pilot basis. Details will be announced soon. The purpose of this scheme is to encourage persons on the Live Register in receipt of unemployment benefit/assistance for 13 weeks to set up an enterprise as an alternative to continued receipt of unemployment compensation. The scheme will provide for the payment of an allowance of £50 per week to a married person and £30 per week to a single person for up to 52 weeks if the business continues for that period. Up to 500 applications will be accepted for the pilot phase. Joint applications from eligible persons wishing to set up in business as a co-operative will also be considered.

The scheme will be administered by the National Manpower Service and application to participate will be made to the local offices of the service.

We hope to introduce the necessary Supplementary Estimate for expenditure under the scheme in Dáil Éireann without delay and the scheme will become operational very shortly.

The Government are committed to protecting the living standards of social welfare recipients notwithstanding the difficult circumstances of this year. Further evidence of that is provided, if further evidence was required, by the Government's decision announced today to make a double payment to recipients this Christmas. Social welfare expenditure is the Government's largest public expenditure programme — as a percentage of gross national product it has doubled in the last decade. A large part of that increase is due to the increases in the numbers of——

Mr. Lanigan

The Minister slipped that in nicely.

Mr. G. Birmingham

Somewhat to Senator Lanigan's disappointment, I have to say. His face seems to have fallen somewhat. It may provide additional employment in the printing industry if some documents ready for the weekend have to be scrapped.

A large part of this increase is due to increases in the numbers of recipients; in this context the increase in the numbers out of work has of course, been a major factor. The impact can be illustrated by looking at the level of expenditure on unemployment services during recent years. In 1980, expenditure in all unemployment payments amounted to some £170 million. By the following year this figure had risen to some £255 million. In 1982, expenditure had increased to £381 million and this year the overall cost of the unemployment services will be around £473 million or some 25 per cent of social welfare expenditure.

Not only are the Government ensuring that unemployment and disability benefits are being kept in line with take home wages and salaries but where possible they are ensuring that additional assistance over and above the standard increases will be provided for specially disadvantaged groups. In line with this commitment an increase of 5 per cent was recently provided for the long-term unemployed.

With regard to the income maintenance services provided to the unemployed a Commission on Social Welfare has been established by the Minister for Social Welfare to undertake a general review of the whole social welfare code and to make recommendations for the development of the services having regard to the needs of modern Irish society. Under their terms of reference, the Commission, who will report to the Minister within two years, are asked "to examine and report on the relative responsibilities of the Departments of Social Welfare and Labour and of their respective offices with respect to the unemployed, income maintenance, training, and placement".

I simply comment that I found the remarks by Senator Higgins provocative and cogent.

I would also like to take the opportunity of detailing again a further decision taken by the Government following a recommendation made by the Cabinet Task Force on Employment on measures to overcome obstacles to unemployed people engaging in voluntary work. This was a subject that was mentioned by a number of Senators in the earlier debate on youth employment. The objectives of the scheme, which is now being implemented by the Department of Social Welfare are twofold, first, to inform the unemployed of their freedom while in receipt of unemployment benefit or assistance to involve themselves in voluntary work and to encourage them to do so and, secondly, to encourage voluntary organisations to involve the unemployed to the greatest extent possible in their existing activities and to encourage them to create new opportunities for voluntary work.

In conclusion, I would like to say that I welcome this opportunity to debate our unemployment difficulties and hope that my remarks will contribute to a better understanding of what the Government are doing and what we intend doing in the future. There are, undoubtedly, a number of factors contributing to our unemployment problems over which we have little or no control, such as the international recession. There are, however, other areas where our future lies very much in our own hands and relates directly to actions that we take now. In the forthcoming wage round we must opt for moderation which will contribute to job creation and job maintenance. We have made progress on the public finances but much still remains to be done. The efforts made by the Government in the areas of selective manpower and employment programmes are, I submit, on a scale equalled in very few countries. These measures have both economic and social objectives. They are aimed, inter alia, at giving those at present outside the workforce an opportunity to obtain work and its benefits by putting them in a better position to get jobs.

I thank Senators for their contributions, all of which will be very carefully taken note of.

Mr. Conway

This motion, framed by Senator Higgins and sponsored by the Labour Party, asks us in the Seanad to identify the sources and causes of the great cancer now eating this country. It asks for responses and solutions to the great problem. Terrible degradation has been suffered by people who were once proud and happy, men and women who are now reduced to a state of hopelessness and cynical of everyone around them. Through our unemployment centres in Newbridge, and my work throughout my constituency in Kildare and through my own business, I come in daily contact with young people and with men and women who are unemployed. Some of them are now unemployed for over 18 months. There are cases where the husband is in the age group of 45 to 50 with no hope at all of getting a job, who was drawing at the start unemployment benefit, pay related benefit and a tax rebate but he is now drawing assistance with a mortgage unpaid and the telephone taken out of his house and his car gone, his children in secondary school and no possibility of making ends meet. What hope have we got, or has the Minister got in his long speech, for these people? Other families with equal problems are living in local authority houses where the unemployment level has now reached over 60 per cent.

I agree that there should be an income maintenance for these families. The single biggest issue facing the country today is unemployment. With our people employed the problems of unemployment benefits, drug problems, health, social disorder would be at a minimum.

Senator Christy Kirwan, who has long experience in the trade union movement, speaks from the heart with sound commonsense. To ignore what he says is a risk we cannot afford to take for ourselves and for our children, and for the future of democracy in this State. I am talking about a very serious problem with young people marching in our towns. We have not even seen the start of it. Our young people who are unemployed are fair game for drug-pushers and for the godfathers who control the streets in our towns. Six months ago we had 13,500 people on short-time working and now we have 3,000 because 10,000 of those people who were on short-time working are now drawing social welfare benefits. We have roughly 60,000 people unemployed and we know that the ratio of jobs in the construction industry to outside is 2:1. We need to encourage investment from insurance companies and pension funds back into industry through the National Building Agency. We need to put money into house building because some people are living in desperate conditions. We need to bring in imaginative ideas to encourage people to invest their money in the building industry.

The Housing Finance Agency which has attracted funds from insurance companies and pension funds has helped many young people to buy their own houses. Otherwise those people would not have got mortgages.

I proposed at Kildare County Council that we set up a committee to examine the introduction of a toll system on our motorway. The flow of funds from this motorway would be the catalyst to attract money from insurance companies and pension funds thereby setting up a roads finance agency. That agency could fund road construction and create employment in local authority areas in the building of roads which are badly needed.

I advocate the re-examination by the IDA of their grant structure. Our new poor are living on the east coast. The IDA, which described Kildare as a disaster area, should once again look at its grant system and increase the level to 60 per cent. Kildare should be equivalent to places like Leitrim for grants and that would go a long way to attracting jobs to that part of Leinster.

Another matter that should be looked at is the operation of county development teams. They should be given real powers for job creation and money to allow companies in rural Ireland to start businesses. Many companies we know of in our own county are closing down day after day or are about to close down. That information is with Fóir Teoranta, who have all the financial information about those companies. We should have imagination to examine those companies and set up co-operatives in them. Those co-ops should be fully backed by the State agencies and allowed to develop. The IDA should allow a manager be appointed for two years, pay him for that time, allow a building rent free, allow the shareholders, who would be part of the co-op, ask for subscriptions from the public and match that amount pound for pound from the Youth Employment Agency. The IDA should give them the respective grants. The workers should be allowed to continue for a period of six or nine months drawing the unemployment assistance while working in the co-operative. This idea could be the basis in which we could turn industry about. We have seen this in Kingswear Co-operative which has now great backing from the IDA. The IDA after looking at it granted a manager free for a year, gave the premises free and grants for new machinery. This should be the answer to holding on to Kingswear as a co-operative. I believe what Christy Kirwan said about the multinationals. We have the Polaroid factory in Newbridge and the Black and Decker factory in Kildare and they stand as monuments, white elephants, to the policy of the IDA of pouring money into large organisations and forgetting about the small units which are the hope for employment here.

We should have a complete review of our school curriculum and take a European language and the use of computers as a normal occurrence in schools. Germany is now as near to Cork as Dublin. Our attitude towards travel and distance has now changed and we feel part of Europe. Therefore, we must train our people to take full advantage of the technology available. It is on technology that we will be tested. We should equip our people at school level to take any post in Europe and any post in technology. I agree with the idea of the ESB to send many of their high executives to Europe, Asia and Africa to train and help companies in those countries. It is in this area that we should play a leading role. We should have one basic skill for everybody. We should have a skill, like I have a skill in accountancy, for each person whether it is in gardening, car maintenance, blocklaying or office work. Each person should have some skill he can fall back on. Our schools, therefore, should educate our children for jobs and make sure they are equipped to handle all situations they may find when they leave school.

Work experience programmes should be for a period of 12 months. After that a subsidy should be given to the employer to continue the employment. Unemployed people who wish to start their own business should be allowed social welfare for two years. The findings of the Telesis Report should be implemented. Employers and management must change their attitude towards work and towards one another if we are to survive as a nation. There must be absolute co-operation and not one trying to outdo the other. They will have to embark on an idea of profit-sharing, and more employees should be made members of the board with real power. We must show imagination.

We have discussed our power stations. We have a power station in Kildare, the Allenwood power station, and I would advocate that that be looked at on the basis of using it to burn refuse. If that was done a lot of glass houses could be erected around to grow tomatoes, grapes and so on, thereby providing employment. We need people with imagination and new ideas. We need a radical approach to our semi-State bodies with the National Development Corporation playing a major role. To stem the tide of unemployment and all the evils it brings with it we need here more than ever before people whose horizons are not limited by the obvious realities. As George Bernard Shaw said, we need people who can dream of things that never were and say why not.

Mr. Browne

Tá mé an-bhuíoch do Pháirtí an Lucht Oibre a thug cúig nóiméad dom agus ní bheidh mé níos mó ná sin. For the simple reason that time is short I will leave out my introduction. We all accept completely that this is a very serious problem. I should like to make two suggestions. Agriculture is the one hope I see for creating jobs here. I cannot see why if we have the best land in Carlow for growing vegetables, if we have a factory like Erin Foods and the demand, we still cannot manage either to produce or market vegetables in a way that will make profit and make them more attractive for the housewife. That is very important. We must present them in a way that housewives will buy them.

The second point I should like to deal with is profit and capital. Senator Kirwan had a great time knocking those without being one bit positive. I fail to stop admiring people, small and big shopkeepers and small industrialists, who are still prepared to pump their own money into keeping this country going and are giving employment to a lot of people who otherwise would be on the dole. They are perfectly entitled to make profit. The problem at the moment is that the private companies that cannot make profit are gone. Up to this semi-State companies who were not making profit were being bailed out by the Government, but the day is coming when the Government will not have any more money. It looks as if the Government are no longer the responsible body, it is simply the taxpayers who supply the Government with money. I should certainly like to commend those people who are risking their own money. Many of those who knock them would not put a pound of their own money into any enterprise because of the risk of not getting it back.

Senator Kirwan mentioned that in the Eastern bloc there is full employment, but one could give a lot of answers to that statement. I would still prefer, as he would, to adopt our own system. It is very easy to have full employment if there is not a trade union, pay agreement or anything else to be negotiated. Thank God we live in a democracy. We may be overdoing it but, on the other hand, it is a nicer way to live.

The idea of knocking economists is another great pastime we have. When I was young there was a proverb, or old saying, that if one minded the pennies the pounds would look after themselves. Obviously, long before economics became the in word the old people seemed to think that one had to have something in reserve, but now we seem to have adopted the suggestion that we spend the pounds whether we have them or not and look to the Government to rescue us. The days are over, unfortunately, when the Government can rescue everybody but I do not think the days are over for the country. It is good to see signs that there is a rise in the prospects for employment and the economic outlook. That is very important. It is time we stopped talking about the young people leading a revolution. If we keep telling them long enough that there should be a revolution there probably will be. They have enough problems besides putting that into their mouths. I have the utmost sympathy for them. I teach them and I know exactly what some of them are stating, but all these slogans are becoming very popular. I regard them as eloquent rubbish. It is time they were abandoned. I should like to thank the Labour Members for permitting me say those few words.

Mr. McGonagle

I have been told that I have until 6.45 and there is not much I can say in that length of time. I was a militant activist in the thirties talking about unemployment. I am still convinced that what I thought was wrong then is still wrong. We have been given a very fine document and I congratulate the Minister on it but it is within a context and makes no effort to go outside the context. It is within the context of an entrepreneurial society and a free market economy. It does not have one sentence pointing to the necessity for State enterprise. We had men of vision in the early years of the formation and setting up this State who saw the necessity, the economic and political necessity, to set up State enterprises for the good of the Irish people. For the timid souls who are afraid of socialism they were not socialists. Believe me, State enterprise is not socialism. It is something that must be done because it has to be done in the circumstances in which one finds oneself. A nation that faces a dilemma must use its resources.

The State has a moral obligation to provide employment for its people. I do not accept, for instance, the statement in the document that Ireland, as a small open trading economy, cannot isolate itself. That is nonsense. What the State should be doing is preparing plans not when the recession is on top of it and not going through debates like this wondering what kind of little detail we will throw in and original ideas. The plan should be ready to go into operation when the recession hits, and it should be ready prior to the recession. It should use all our natural resources, manpower resources, training, anything that we have got by way of resource. With regard to the talk about spending cuts and all that kind of balderdash, in this particular area there has got to be no meanness about cutting. We are facing a different situation today than this country faced years ago when all the Irish boys and girls had to do was to go with an attache case to the nearest boat. They cannot do that now. There is no safety valve. We are living in a different era. I am not preaching revolution to the young but it may come. There is a point of frustration when they will not go back. It does not make sense to me to train people in technical skills, or educate people if we cannot provide them with useful and gainful employment. The obligation must be on the State when the graph of unemployment is rising. The national planning board is a good idea. I trust that when they produce a report I will be able to read that State enterprises will have to play a part.

Mr. Magner

One thing that has become painfully evident in the last few years is that the waving of party manifestoes either to each other or to members of the public is a dying trade that no longer has any credibility. I have been involved in politics since 1959 and I have always held the view that there are men and women in all political parties who are tremendous patriots, who think a lot of their country and who have done a lot for their country. It saddened and sickened me in many ways to see the media who in many cases live off the politicians being so open with their derisory comments recently and in many ways contributing to the atmosphere of distrust and contempt for political structures and politicians. The papers feed it most unfairly on many occasions. A lot of the criticism is justified, a lot of it is not and, what is even worse, they know it is not.

I want to say to Minister George Birmingham that I am sorry that the Cabinet does not allow Ministers of State to sit around the table with the more senior members. Like Kennedy I believe the torch is passing to a new generation and that new generation could begin by changing the system here. This dialogue of the deaf is supposed to be a situation where the Minister comes in, listens to a debate on this topic and then replies, but we know that every Minister who comes in here gives us a speech and he has already answered us before he has heard our contributions. The whole thing is a bit of a charade.

I should like to refer to what Senator M.D. Higgins said earlier about employment exchanges, and I mentioned this to Minister Kavanagh. I cannot understand, if we accept that full employment is an unlikely possibility in the short or indeed, in the long term, why we insist on making people queue outside exchanges like Gardiner Street and in Cork, snaking right around the sides of the building, and for what? What is the point? To prove they are alive? The State sends out more money every week through the post than is paid over exchange counters. That is done in pensions and all sorts of social benefits. We have in the region of one million people in receipt of State money and most of it is sent through the post. We insist on this archaic, idiotic system of making a man or woman travel to queue up in the rain to get their money.

The labour exchange is a place where one exchanges ones dignity to get one's own money, quite frankly. A lot of people I have spoken to said that when they are facing redundancy they are not mainly concerned about losing the job — it is not the major concern to them although it is obviously a big factor — but about the thought of having to go down to the exchange. Yet, we are doing nothing to change the system. There is no longer a valid reason to insist that hundreds of people queue or go down to the local "cop shop" and produce the body to the sergeant. I would urge the Minister of State who is a very young man, thank God to convince the Cabinet that this has to go if the lack of full employment is to be a permanent feature of Irish society. I am not so enamoured of work that I think everybody should be out breaking stones for the joy of it. There is nothing tremendous about work. It is a very recent phenomenon in terms of our history that people got up and clocked into some lousy, dull, dirty, filthy engineering place, and spent eight hours there. One is supposed to feel absolutely fulfilled and satisfied after that. Most people do not feel this way and there is no reason why they should. The work ethic was preached by a gentleman riding around on a horse saying how good it was for people. If it is a long term situation and we are not going to have full employment — we are not and we should face up to that because if this recession is doing anything it is holding back the tide of technology waiting to come in here because firms will not invest — I certainly hope to see something substituted for labour exchanges. They are no longer warranted. We can impose penalties on people who defraud the system. They can be savage, if necessary, but this continued degrading of people should be stopped. I hope that Deputy George Birmingham will make his mark by changing that idiotic system of degrading people.

I should like to quote Ernest Bevin who said:

We only seem to be in full work, either when there is a war on or when we are planning for war ... but if the nation can organise a great defence programme against war, it can do so against other enemies — unemployment, poverty, malnutrition and disease.

I talked about waving manifestos, and it seems to me that we should tackle the problems we are faced with in that sort of spirit. If this country was invaded tomorrow it is amazing the differences we could bury, the sacred cows that would be thrown out, in defence of the nation, and yet we cannot seem to mobilise ourselves to run what essentially in population terms is a suburb of London. We cannot seem to manage to get the game together.

In a recession the problem is that people lack the confidence to put money into the economy, and yet we saw the absolute obscenity when Atlantic Resources came on the market with the millions of pounds coming out of holes in the wall and so on to be put in there on a speculative basis by the same people who would not put a cent at the moment into Irish industry. They are some patriots. It should be spelled out loud and clear that this was a quick buck philosophy that is endemic in our society. It is a disgrace that in a country that is starved of investment capital suddenly this can materialise overnight, in for the quick kill and off again.

The hope I see for the future is in the small firms, the small business sector. That will be the real growth area in the Irish economy. Yet, I do not think we do enough to aid it. The IDA now have this small business sector and so on, but I pointed out to a Minister that the company taxation scales apply equally to small companies as to large companies. The treatment seems to be the same when it ought to be different because of the scale of the enterprise. The advantages of the small firm are obvious. They are documented in the Small Firms Association's booklet, and I should like to quote the following from that:

There is one overriding problem that faces the Small Firms Sector in this country. That is recognition, the recognition of the Sector as one which requires specialised attention and assistance. This lack of recognition is widespread, and with a few exceptions (e.g. IDA Small Industries Division) it means that the small firm must deal with people and organisations who do not fully appreciate its difficulties.

In the practical situation the problems of financing in the broadest sense are the major worry facing the Small Firms: The Small Firm tend to get caught in the liquidity trap which is aggravated by circumstances primarily associated with being small, e.g. only short term credit is available from large raw material suppliers while the need to retain business outlets makes the provision of long term credit to customers inevitable. The Small Firm is in a very weak position when a "credit battle" commences.

Because of the scale of operation of the Small Firm, it frequently has to hold uneconomically large stocks of raw materials and fuel because of the minimum delivery conditions from suppliers.

A lot of enterprises here want to achieve economies of scale so they decide, like the oil companies wanted to do, to cut down the deliveries to rural stations and if one could not take a tanker full one did not get anything. Large companies tend to say to the smaller companies, "except you take X amount you cannot get it or it is going to cost you 10 or 15 per cent more." That in itself must be a major disincentive for small companies to try to keep going in the current recession. I ask the Minister to look at that because it is as valid today as it was two years ago when that association produced this booklet.

The association said:

Costs associated with labour tend to be a greater burden on the Small Firm because it is usually labour intensive.

We do not differentiate between the Asahis and the guy down the road with 20 workers. He pays exactly the same taxes in terms of social tax. There is no recognition of his size and his problems, which may not be such a problem to a major multinational or, indeed, a major native company.

It is worth noting that we pay £40 on the work experience programme if a small company takes in such a trainee for a period. What they really need at times is almost a tax holiday for a year to get off the ground because they have not got the capital or the cash flow at the early stages of their development with four or five employees. In many cases it is the family plus the managing director plus two more make up the company. It is then that they need State assistance not in terms of taking on more people, because they are not at that stage, but they need help in terms of taxation relief and so on.

The Small Firms Association dealt with the difficulty of getting capital from banks for expansion and so on, and the conditions imposed upon them are far more rigid than those imposed on their bigger competitors plus the fact that they pay a higher rate on their borrowings. If we are serious as a Government and as a nation in trying to encourage that sector, which has immense potential for growth, all of those areas have to be looked at.

The other point I should like to make about small firms and small industries is that for a small industry making a product which is suitable for export it is literally financially impossible for that firm to send a representative abroad, to America, the Far East or wherever. The idea of trying to get companies that manufacture complementary products with the help of the Government to send a representative into the field selling is a valuable one. I mentioned in a previous debate that we do not give enough recognition to people who go abroad selling for this country. I spoke recently to a person who worked for a semi-State organisation about his life style. He can be in Nigeria this week and South America next week. I thought it was very glamorous and adventurous until I discovered that after a few trips to Nigeria or some other place it becomes old hat and one would prefer to be at home. There is not enough recognition either financially or otherwise by the State of the efforts and the work these people put in. I ask the Minister for Trade, Tourism and Commerce to give them the recognition they deserve. The Minister should go back to his Cabinet colleagues and tell them to scrap the idiotic system of having people queuing around in the rain to get their own money.

Question put and agreed to.

Seanad Éireann debate - Wednesday, 16 Nov 1983