Priority Questions
1Deputy Willie O’Dea asked the Minister for Jobs; Enterprise and Innovation his views on his record on job creation so far; if he has a plan for dealing with job losses; and if he will make a statement on the matter. [4337/12]
View answerThe role of Government is not to create jobs directly but to create the appropriate business environment by making the right policy decisions to help enterprise to grow, to create new jobs and to maintain existing jobs. In the wake of many years of unsustainable policies that produced an oversized construction sector, a property bubble, a collapse in the public finances, and years of declining share in export markets, the challenge we face now is to totally transform our economy. This will be a difficult transition, particularly in the face of declining international growth. There is a great deal of restructuring and reform required to enhance the capability of enterprises to create employment.
However, since I came into office, I have been working with my Government colleagues to achieve this objective. We launched a jobs initiative last May, within two months of the Government coming into office, to stimulate domestic demand and restore confidence in the economy internationally.
Key areas which I have been working on since then to support job creation by enterprise include improving access to finance for businesses, reforming the statutory wage setting mechanisms, reducing other costs and administrative burdens for enterprise, improving our export performance and supporting innovation. I have also been co-ordinating the preparation of the first annual action plan for jobs on behalf of the Government, which will outline the measures to be taken across a range of Departments to support job creation in 2012.
Significant progress is being made in spite of the continued difficult economic conditions which pertain globally. Last year, in spite of a continued suppressed global market, IDA Ireland supported the creation of more than 13,000 new jobs in client companies, an increase of 20% on the previous year's figures. The agency won a record 148 new investments in 2011, an increase of 17% on the previous year. The IDA has also made a further four announcements to date in 2012, which will create an additional 332 jobs in client companies and support a further 250 indirect construction jobs.
Enterprise Ireland reported that employment in client companies stabilised in 2011, with 141,228 full-time employees, similar to 2010. The agency has also been able to announce the creation of 337 new jobs in client companies since the start of the year.
Additional information not given on the floor of the House.
Enterprise Ireland also estimates that client companies' export sales last year will exceed the pre-recession record levels of 2008. The CSO's latest trade figures show that, up to November 2011, Irish exports overall increased by 4% compared with the same period in 2010, to in excess of €69 billion.
I thank the Minister for his reply. I heard the Minister talk about the past but we are in the present now and he is a member of a Government which has been given an overwhelming majority by the people as a result of putting forward a policy, the centrepiece of which was to create jobs. The average rate of unemployment in the past 12 months during which the Government has been in office is 14.2%, as opposed to 13.7% the year before and 11.8% the year before that. There are now more than 443,000 people officially unemployed, with more than half of them being unemployed for more than a year. That is approximately the same figure as at the start of the year. According to the best estimate, at least 77,000 people have emigrated during the past 12 months. I presume most of them were not just going off to see the rest of the world but left to seek work. That amounts to 200 people emigrating per day and there are 443,000 on the live register. In view of those figures, does the Minister consider his jobs initiative introduced last May was a success?
The Minister is about to announce a new jobs initiative. It is a case of another year, another jobs initiative. What new ideas does he propose to put forward in that next initiative that will succeed where the last one obviously failed?
The Deputy and his party continually want to pretend that the past never happened but the reality is that the economic collapse-----
This is the present and tomorrow is the future.
-----that we have faced is the product of a number of years of bad policy, and during those years we lost 350,000 jobs under the previous Government's remit.
How many jobs has this Government created?
The challenge for this Government is to pick up a very difficult environment and start to rebuild the economy.
When will the Minister start to do that?
The truth of it is that it will take painstaking work. We have had to restructure the banks to put them in a position where they can once again lend to small businesses.
As I said in my reply, we have had successes in the past 12 months, despite the Deputy's unwillingness to recognise them. For example, in the food sector we have had the best year ever with 14% growth in food exports. That is a sector which clearly has huge connections back into the Irish economy. Its impact on farming and on food processing is enormous. Therefore, there are successes.
There are, however, continuing difficulties in some sectors about which we know. Our banking sector, unfortunately, got trapped into a lot of property dealing and that sort of banking no longer exists. As I said in my reply, there is painstaking work to be done.
As to whether the initiative made an impact, it has. Cutting employer's PRSI and cutting the low rate of VAT has secured an increase of 6,000 in the number of people in the tourism sector. Therefore, the initiative is working.
Not one net job has been created during the past 12 months that the Government has been in office. The reality is that unemployment is literally at the same point it was at the start of the year.
I have two simple questions for the Minister. First, can he give those who are unemployed and who are emigrating any succour by indicating whether he thinks if we are sitting here in the same position this time next year, that unemployment will have fallen? Second, in regard to the financial services sector, of which he has plenty advance notice that there will be a massive fall-out in terms of employment, has he done any advance planning to address that because it is imminent?
A plan was launched last year by the Taoiseach, as the Deputy may know, in respect of the potential for growth in the financial services sector. It is expected that the financial services sector has the capacity to create 10,000 additional jobs in the foreseeable future. Therefore, there is planning.
Obviously, there are other parts of banking that we know about in light of the recent announcement by some of the banks where there will be a decline and there is a need to support a transfer to the new opportunities. Some of that will involve reskilling. Part of the jobs initiative, of which the Deputy is so critical, included Springboard, a specific initiative aimed at people who have lost their jobs in one sector to reskill and transfer to others. There is a good deal of rebuilding to be done to transform this economy successfully into a strong export-led recovery, but that work is being done and we will see the fruits of that.
2Deputy Peadar Tóibín asked the Minister for Jobs; Enterprise and Innovation if he will establish an emergency enterprise task force within one of the enterprise development agencies in order that such a task force should be able to intervene in businesses that are in serious financial difficulty before they are forced to close and shed workers. [4335/12]
View answerJob creation is at the top of the Government's agenda. Since we came into office, this Government has been working to create the improved economic conditions which will support the maintenance of existing jobs and the creation of new ones. Our objective is to put the country back on the road to economic recovery and full employment.
It is an unfortunate reality that companies, for a wide range of reasons, get into difficulty. Early intervention is critical and that intervention must, where possible, occur before the situation is irretrievable. For this reason the enterprise agencies operate an early warning system which triggers the full capacity of the agency concerned to intervene with the company and deal with whatever situation is emerging. I am satisfied this system works well but I will continue to keep it under review to best serve the companies concerned.
Clearly, prevention is better than cure and this is why the enterprise agencies work closely with their client companies in order that strategic interventions can be taken that avoid the company getting into difficulty in the first instance. These interventions help clients make the strategic and operational changes that will retain their competitive position in a rapidly changing global environment. Depending on the company's need, changes can include skills uplift, technology uplift, process improvements such as lean manufacturing, energy efficiency and better logistical management, supports for in-house research and innovation activity, management development such as the leadership for growth programme, assisting a company entering new or emerging geographical markets, support for clients' strategic finance capabilities, access to mentors and so on.
The enterprise agencies work closely with other Departments and partner development agencies to respond to specific incidences where larger companies suffer a significant job losses or where a significant number of jobs are at risk. The objective in these circumstances is to identify all opportunities to maximise the number of jobs maintained, for example, through support for spin-out start-ups, management buy-outs or commercial partnering. Task forces comprising relevant personnel from the Departments and agencies and other key stakeholders are used in these cases.
Additional information not given on the floor of the House
Many small businesses are facing particularly difficult trading conditions. A number of initiatives have been taken to help them. The low rate of PRSI has been halved. The county enterprise boards have also recently introduced a financial health check, reporting and benchmarking tool, in association with Enterprise Ireland lean manufacturing, to help small business assess their difficulties.
The Government has intervened to help businesses who are struggling to get credit. The Government has imposed lending targets on the two domestic pillar banks for 2012 and 2013. Businesses having difficulty with credit refusals can use the services of the Credit Review Office which will carry out an independent and impartial review of a bank's decision to refuse or reduce credit.
The economy is undergoing a difficult transformation. Some sectors grew to a scale that was unsustainable. Part of the challenge for Government is to help people move into new sectors of opportunity. In the context of the action plan for jobs, we are looking at other ways in which business can be assisted in overcoming difficulties.
The Government's priority is not job creation. There were €20 million worth of new job creation ideas in the last budget but 150 times that amount is going into bailing out the banks. The Government's priority is the inverse of what the Minister says. Its priority is the opposite of job creation. The Government is prioritising the bailing out of banks.
There is an avalanche of businesses within the system that are at the edge of viability. Many of these will be forced to close over the next number of months and years. The corporate and sovereignty figures show that 1,683 businesses closed last year, up 16% from 2009, with construction, retail and hospitality bearing the brunt of this. In my home town, Spicers Bakery was on the go for 180 years. It has had to let go 27 employees, with the remaining 20 employees hanging by a thread. When I called the Minister's office and asked that he engage with Spicers Bakery, I was told by an official that the bakery was not a client company of Enterprise Ireland or the IDA and that there was no mechanism to engage with the business, even though it is a manufacturing business.
Given that so many jobs are hanging by a thread and that enterprise agencies engage with small new start-ups, why is there not an agency within the Department that would engage with all types of businesses before they come to the final stage of not being viable and being forced to lay off staff?
The reason for that is that we have agencies, such as Enterprise Ireland which specialises in the support of indigenous companies and IDA which specialises in the support of foreign owned companies who come to locate here. They have the competitive advantage within the State system of understanding the needs of those businesses. To suggest, as the Deputy is doing, that we create a new agency to pick up casualties within the Enterprise Ireland or IDA brief does not make sense. We need to ensure that Enterprise Ireland, IDA and, where appropriate, county enterprise boards have the advance knowledge - the early warning system I spoke of - and supporting instruments. A business must come forward with a credible business plan before it can draw down support from these agencies in terms of rebuilding its economy.
The Deputy suggests that the budget is anti-jobs. The whole thrust of what the Minister for Finance has done is pro-jobs. He cut the VAT and PRSI rates, improved the research and development tax credit, gave small start-ups three years free of taxation and reformed the seed capital scheme so that people who want to start up a business can draw down up to €600,000 of the tax they paid in previous years to establish a new business. It is all about trying to drive new enterprises to grow and develop.
We are in a difficult financial area, and everyone understands that, but the measures being taken are trying, against that background, to maximise the chances for growth.
The Minister reminds me of an estate agent who tries to sell a famine cottage as a rustic residence with character. The Government's policies are hollow. They are merely tinkering around the edges. The cost of each additional person on social welfare is €20,000. I have given the Minister an example of a business with which the Department and the enterprise agencies are not engaging. Many business people who are in the same situation will read the text of today's debate and ask where the Department was when their businesses were teetering on the edge. If the agencies currently working in this area are carrying out these roles why have their remits not been broadened to include all businesses that are teetering on the edge?
The economy is undergoing a difficult transformation. Some sectors grew to a scale that is not sustainable. As the Deputy knows, the construction sector grew to unsustainable levels. The task of Government is to help companies that have a viable future to create that future, but we must also look at companies that are not able to survive in their present form but can be helped to establish new spin-off business. We have seen many such companies being successful. Recently we had the very difficult experience in Waterford where a company, for all sorts of reasons that we know about, closed down. We have been working to try to redevelop that and we now have an indigenous enterprise, driven by Waterford-based people setting up a leading edge company and using many of the existing talents. That company has a strong future.
In some cases a transition has to happen. That is what we are seeking to support.
3Deputy Catherine Murphy asked the Minister for Jobs; Enterprise and Innovation in view of the recent announcement of a foreign earnings deduction scheme for Irish-employed workers based in Brazil, Russia, China, India and South Africa, his plans to introduce a guaranteed export credit insurance scheme for Irish exporters to these countries; if not, his reason for not introducing such a scheme; if, with regard to such a scheme, he will favour a wholly State-backed model or a partnership with an existing private sector provider; if he will immediately make fully known the content and findings of the 2009 KPMG report commissioned by the previous Government into the issue; and if he will make a statement on the matter. [3942/12]
View answerThere are no proposals to introduce a Government guaranteed export credit insurance scheme for Irish exporters to these countries. The Government's position on this issue has been informed by the findings of the 2009 report commissioned by my Department from KPMG consultants. That report established that the introduction of such a scheme would be expensive, with significant ongoing costs arising for the State. Annual costs in respect of quite a low level of intervention in the export credit market would be about €1.7 million, and this cost would rise significantly if higher risk profile exports were covered. In addition, it was found that such a scheme would be of very limited impact and that a negligible number of jobs could be connected with such an initiative.
Under EU state aid rules, any such state scheme is not normally permissible for short-term credit insurance. Most Irish exports fall into this category. A temporary derogation was established in 2009 due to the financial crisis at that time. That is now under review and is very unlikely to be maintained. Even under this current exemption, the specific provisions of any scheme must be approved by the European Commission. Approval would include a condition that the level of insurance premia to be paid by companies should be higher than rates provided in the open market. This is a considerable deterrent to business, and some of the schemes introduced by other member states had poor uptake for this reason.
In the intervening two years, there has been an improvement in the market for short-term export credit insurance. Insurers have recovered their capacity for risk and the market has recovered significantly, with both new entrants to the market and new products being offered. This has greatly improved the availability of export credit insurance on the commercial market.
The publication of the detailed KPMG report is not possible. The forensic analysis on the operation of the market for this type of insurance was only possible through the provision of sensitive, confidential data and detailed company specific information to KPMG. This information was provided to KPMG on the condition of strict confidentiality. Given the commercial sensitivity of this material and the limited number of companies in the market, both KPMG and the Department signed legally binding agreements with the insurers that the information provided would not be released.
Additional information not given on the floor of the House.
While the background research and analytical elements of the KPMG report cannot therefore be released, the key overall findings were publicised at the time and supported the view that a State supported scheme of short-term export credit insurance should not be introduced. This remains the position but will be kept under ongoing review, including in light of advice and evidence from the appropriate agencies and business representative groups. As the Government has a responsibility to ensure efficient use of scarce resources, a commitment of large-scale funding to an initiative with marginal benefits for Irish industry and high level risks to the State would be unwise.
In our dealings with Brazil, Russia, India, China and South Africa - the BRICS countries - we do not have the natural advantage of the kind of relationship we enjoy with Britain, America or Australia, where there are large Irish communities. If we are to achieve the growth rates the Taoiseach talked about today, we must go outside our traditional markets.
It is disappointing that we cannot see the report. Can any element of the report be released? It would be very useful for us to see the benefit of the measure.
There are, possibly, opportunities that are eluding us. For example, at the end of February we will face both a threat and an opportunity. The threat is to our public services. There is also an opportunity in the 7,500 people who will be receiving a lump sum payment. Why do we not look at scenarios where there may well be opportunities for people to invest in a jobs-led initiative where there would be a guaranteed return on their money? The State must be involved. This is the kind of public private partnership that is worth exploring. Can the Minister of State clarify whether part of the KPMG report might be released?
I appreciate the point the Deputy is making. The strict confidentiality clause, which was one of the conditions that applied when people gave information during the compilation of that report, should be respected. We can provide the Deputy with the information that is available from Enterprise Ireland about export figures and the opportunities that are arising in the BRIC countries. The Deputy also asked about investment in jobs and the opportunities that will arise after February. A great deal of work is ongoing at Government level to compile the new action plan for jobs. More lateral themes are being explored as we do that. I hope the Deputy will take in good faith my assurance that we are trying to explore and mine as many opportunities as we can. I say that in response to the point she made about job creation. If I understood the point the Deputy was making correctly, she said we should avail of the intellectual capacity of people who will find themselves in a new situation after February of this year. The State needs to provide opportunities to such people, or engage with them at least.
Almost 7,500 people will leave the public service with a lump sum payment in the coming weeks. A substantial number of them will be looking for a safe place to put their money. We are aware that a substantial amount of money is being saved in this country. The patriotism that is out there can be exploited if there is a prospect of a guaranteed return on an investment in this country that delivers jobs. It is the kind of thing that remains untapped. The point I was making was that a safe location is needed.
I take the Deputy's point. The private investment decisions of an individual are matters for the individual in question.
Absolutely.
I take the point that was made about finding a vehicle for a lump-sum investment. I respectfully suggest the Deputy should engage with the Minister for Finance with a view to exploring possibilities in that area.
4Deputy Willie O’Dea asked the Minister for Jobs; Enterprise and Innovation if he will provide the trade balance for goods and services with the UK, with the rest of Europe, with the rest of the world and with BRIC countries for each of the years 2007, 2008, 2009, 2010 and for 2011; his projections for the next two years; and if he will make a statement on the matter. [4338/12]
View answerThe full details of our trade balance are set out in the tables that follow this reply. Complete data for 2011 are not yet available. In summary, Ireland's trade balance with the UK improved from a deficit of €385 million in 2007 to a surplus of €3,009 million in 2010. The trade balance with BRIC countries improved from a deficit of €923 million in 2007 to a surplus of €2,714 million in 2010. A trade surplus of approximately €27 billion prevailed with the rest of the EU throughout the period from 2007 to 2010. The trade balance with the rest of the world improved from a deficit of €2,940 million in 2007 to a surplus of €7,853 million in 2010. The indications for 2011 are that exports will continue to grow in these markets, outstripping import growth in each case.
The strong growth of net exports has helped make a crucial and positive contribution to this country's GDP. This is especially important because some other components of economic growth have been negative. The latest Government forecast for export growth in 2012 is 3.6% and in 2013 is 4.5%. Our export performance has been very impressive. Following the fall in exports during the worst years of the recession, they have rebounded. When the final data for 2011 are published, it is expected that a modest increase will have been achieved despite the economic difficulties in some of our key markets. Furthermore, volume trends have been particularly good as we have become relatively cheaper in many markets. The strong performance of the food sector, with its deep links to the wider economy and indigenous firms in particular, has been a positive feature of our export recovery.
I am confident that our exporting momentum will be maintained for the coming years, subject to conditions not deteriorating in the world economy. Exports from Enterprise Ireland clients, which cover much of the indigenous exporting sector, are likely to reach or exceed €14.6 billion for 2011, which represents an increase of approximately 5%. If there is reasonable stability in global markets, these exports could expand by approximately 5% again this year. The Government is committed to supporting export growth in every possible way. A new role in the promotion of trade has been assumed by the Tánaiste to ensure the impact of our overseas representation is maximised. The new Export Council, which was established under the programme for Government, is being chaired by the Tánaiste. It is developing initiatives to open new markets and increase the penetration of Irish business in existing markets.
|
Country |
Merchandise Exports (€M) |
Services Exports (€ M) |
Total Exports (€M) |
Merchandise Imports (€M) |
Services Imports (€M) |
Total Imports (€M) |
Merchandise Trade Balance (€M) |
Services Trade Balance (€M) |
Total Trade Balance (€M) |
|
|
2007 |
UK |
16,742.82 |
15,758.00 |
32,500.82 |
20,869.23 |
12,017.00 |
32,886.23 |
-4,126.41 |
3,741.00 |
-385.41 |
|
2008 |
UK |
15,864.28 |
15,289.00 |
31,153.28 |
19,202.67 |
11,841.00 |
31,043.67 |
-3,338.38 |
3,448.00 |
109.62 |
|
2009 |
UK |
13,485.29 |
13,610.00 |
27,095.29 |
13,728.07 |
10,565.00 |
24,293.07 |
-242.77 |
3,045.00 |
2,802.23 |
|
2010 |
UK |
13,799.51 |
14,395.00 |
28,194.51 |
14,718.63 |
10,466.00 |
25,184.63 |
-919.12 |
3,929.00 |
3,009.88 |
|
2007 |
Brazil |
161.63 |
122.00 |
283.63 |
240.91 |
14.00 |
254.91 |
-79.28 |
108.00 |
28.72 |
|
China |
1,320.37 |
1,233.00 |
2,553.37 |
4,782.06 |
131.00 |
4,913.06 |
-3,461.69 |
1,102.00 |
-2,359.69 |
|
|
India |
168.34 |
374.00 |
542.34 |
279.93 |
103.00 |
382.93 |
-111.59 |
271.00 |
159.41 |
|
|
Russia |
326.85 |
1,165.00 |
1,491.85 |
77.54 |
166.00 |
243.54 |
249.31 |
999.00 |
1,248.31 |
|
|
BRIC Combined |
1,977.19 |
2,894.00 |
4,871.19 |
5,380.44 |
414.00 |
5,794.44 |
-3,403.24 |
2,480.00 |
-923.24 |
|
|
2008 |
Brazil |
183.25 |
199.00 |
382.25 |
214.50 |
70.00 |
284.50 |
-31.24 |
129.00 |
97.76 |
|
China |
1,609.28 |
1,425.00 |
3,034.28 |
3,901.99 |
430.00 |
4,331.99 |
-2,292.71 |
995.00 |
-1,297.71 |
|
|
India |
160.98 |
423.00 |
583.98 |
265.16 |
88.00 |
353.16 |
-104.18 |
335.00 |
230.82 |
|
|
Russia |
344.47 |
1,244.00 |
1,588.47 |
134.11 |
254.00 |
388.11 |
210.36 |
990.00 |
1,200.36 |
|
|
BRIC Combined |
2,297.98 |
3,291.00 |
5,588.98 |
4,515.75 |
842.00 |
5,357.75 |
-2,217.78 |
2,449.00 |
231.22 |
|
|
2009 |
Brazil |
211.33 |
218.00 |
429.33 |
157.76 |
10.00 |
167.76 |
53.57 |
208.00 |
261.57 |
|
China |
1,632.28 |
1,533.00 |
3,165.28 |
2,591.16 |
203.00 |
2,794.16 |
-958.89 |
1,330.00 |
371.11 |
|
|
India |
158.49 |
582.00 |
740.49 |
280.93 |
116.00 |
396.93 |
-122.43 |
466.00 |
343.57 |
|
|
Russia |
242.65 |
983.00 |
1,225.65 |
81.39 |
135.00 |
216.39 |
161.26 |
848.00 |
1,009.26 |
|
|
BRIC Combined |
2,244.75 |
3,316.00 |
5,560.75 |
3,111.24 |
464.00 |
3,575.24 |
-866.48 |
2,852.00 |
1,985.52 |
|
|
2010 |
Brazil |
259.56 |
180.00 |
439.56 |
166.35 |
49.00 |
215.35 |
93.20 |
131.00 |
224.20 |
|
China |
1,672.30 |
1,790.00 |
3,462.30 |
2,523.62 |
302.00 |
2,825.62 |
-851.32 |
1,488.00 |
636.68 |
|
|
India |
161.69 |
788.00 |
949.69 |
301.14 |
113.00 |
414.14 |
-139.45 |
675.00 |
535.55 |
|
|
Russia |
372.83 |
1,300.00 |
1,672.83 |
159.74 |
196.00 |
355.74 |
213.09 |
1,104.00 |
1,317.09 |
|
|
BRIC Combined |
2,466.38 |
4,058.00 |
6,524.38 |
3,150.85 |
660.00 |
3,810.85 |
-684.48 |
3,398.00 |
2,713.53 |
|
|
2007 |
EU* - (UK) |
39,863.96 |
28,025.00 |
67,888.96 |
17,856.45 |
22087.00 |
39,943.45 |
22,007.51 |
5,938.00 |
27,945.51 |
|
2008 |
EU* - (UK) |
37,922.95 |
29,019.00 |
66,941.95 |
16,975.11 |
27357.00 |
44,332.11 |
20,947.84 |
1,662.00 |
22,609.84 |
|
2009 |
EU* - (UK) |
37,778.60 |
28,765.00 |
66,543.60 |
12,621.27 |
27409.00 |
40,030.27 |
25,157.33 |
1,356.00 |
26,513.33 |
|
2010 |
EU* - (UK) |
37,744.91 |
31,205.00 |
68,949.91 |
12,698.08 |
30,691.00 |
43,389.08 |
25,046.83 |
514.00 |
25,560.83 |
|
2007 |
World (- EU*) |
32,619.30 |
24,177.00 |
56,796.30 |
24,759.94 |
34,977.00 |
59,736.94 |
7,859.36 |
-10,800.00 |
-2,940.64 |
|
2008 |
World (- EU*) |
32,607.11 |
23,639.00 |
56,246.11 |
21,406.90 |
36,419.00 |
57,825.90 |
11,200.21 |
-12,780.00 |
-1,579.79 |
|
2009 |
World (- EU*) |
32,974.89 |
24,759.00 |
57,733.89 |
18,711.75 |
37,212.00 |
55,923.75 |
14,263.14 |
-12,453.00 |
1,810.14 |
|
2010 |
World (- EU*) |
37,672.10 |
28,237.00 |
65,909.10 |
18,282.16 |
39,774.00 |
58,056.16 |
19,389.94 |
-11,537.00 |
7,852.94 |
*Some country data suppressed for confidentiality reasons and therefore not included
I am trying to assimilate the host of figures the Minister has given the House. I cannot get my head around them just yet. An overall trade surplus has been projected for 2012. What increase does this represent on the trade surplus for last year? One of the many figures the Minister mentioned was the projected increase of 3.6% in exports next year. Is that correct?
Is he aware of the view of the Irish Exporters Association that a minimum increase of 5% in exports will be needed to meet the financial and employment targets that are implicit in the IMF-EU deal?
Unfortunately, the way the Deputy asked the question means that a simple aggregate figure has not been provided. Our trade surplus with the UK increased from €2.8 billion to €3 billion from 2009 to 2010. Our trade surplus with the BRIC countries increased from €1.99 billion to €2.7 billion over the same period. Our trade surplus with the EU decreased slightly from €26.5 billion to €25.5 billion over that period. Our trade surplus with the rest of the world increased substantially from €1.8 billion to €7.8 billion over that time. I do not have an aggregate figure. The trends are healthy. Overall, we will have a balance of payments surplus. As a nation, we will be paying back our indebtedness. Of course there are different views about the projected levels of growth that will be necessary if the budgetary targets are to be delivered. Although the troika is expecting a downgrading of growth figures in the wake of its recent visit, it is confident that the Irish fiscal plan is set to meet the target that has been set for it. These matters will be monitored carefully by the Minister for Finance. It is not an issue for me directly.
Does the Minister agree that we continue to rely heavily on traditional markets, like the United States and the rest of Europe? Can he indicate what percentage of our total exports went to the BRIC countries last year? How did that compare to the equivalent percentage the previous year? Can the Minister confirm that the increase in Irish exports to the BRIC countries last year was approximately 4%, which compares very unfavourably to the average increase of 22.5% that was achieved across the 27 EU member states?
The Deputy is looking for figures that have not been compiled in the way he seeks. I remind him that we have authoritative data up to the end of October only.
Yes.
There has been an increase in our trade to the four BRIC countries. The Deputy's point is right, overall. Even though over a four-year period there has been a 50% increase in trade to the BRIC countries, as a proportion of our overall trade, it continues to be modest. One of the ambitions that was set in the programme for Government was to build on our efforts in this area. To be fair, it was also a target of the previous Administration, of which Deputy O'Dea was a part. We are putting more feet on the ground in such countries. The Minister for Finance recently introduced a tax concession to encourage people to place marketing workers in these countries. They will get a tax concession for that. We need to have a long-term commitment to these markets. It is recognised that if we are to increase these figures significantly, we will have to target companies that are willing to make such a commitment. That is why the Minister has offered this tax break.
5Deputy Peadar Tóibín asked the Minister for Jobs; Enterprise and Innovation if he will detail the action taken by him to develop a scheme to draw down support from the EU Progress Micro Enterprise fund to support start up and small businesses. [4336/12]
View answerThe European progress microfinance facility is a European Investment Fund initiative to support entrepreneurship and employment through microfinance activities. The European Investment Fund does not provide direct financing for micro-entrepreneurs, micro-businesses or individuals. Financing is made available through intermediaries participating in the facility. Eligible intermediaries are any public and private institutions which provide microfinance loans and-or guarantees for individuals or micro-enterprises established in EU member states. The European Investment Fund provides selected intermediaries with capped guarantees partially covering their portfolios of micro-loans or guarantees on micro-loans granted to micro-enterprises.
I am developing a microfinance loan fund to provide loans for sustainable micro-enterprises. It is targeted at start-up, newly established or growing micro-enterprises across all industry sectors employing not more than ten people. It will provide loans of up to €25,000 for commercially viable proposals that do not meet the conventional risk criteria applied by commercial banks.
My Department has had discussions with the European Investment Fund to explore the possibilities of access to the progress microfinance facility fund when established. Applications for participation do not require State involvement. To apply to become an intermediary, interested institutions must submit a formal application directly to the European Investment Fund. Applications can be made until 31 December 2013.
The Government recently approved the allocation of €10 million as seed capital for the fund. It is anticipated that the fund will supplement this seed capital by leveraging further funding from private sources, including the banks. I am developing the structure of the microfinance facility to be established early this year. The matter will be pursued further with the European Investment Fund at that stage.
As the Ministers and Deputies on the other side of the House will be aware, a good chunk of the reason so many businesses and individuals are finding it so difficult is the credit system is frozen. The Government has announced a microfinance fund on a number of occasions, yet nothing has happened. The Minister of State indicated how the finance system would work, but the initial budget was to be €100 million which it was viewed would leverage a figure of up €500 million. This would enable institutions in EU countries to channel funding to businesses by means of a guarantee for institutions funnelling the money. This facility was created last March. How much money has the Government or the institutions drawn down to date from the fund and when will the microfinance plan see the light of day
This is the first time the State has provided a microfinance loan facility. The initial fund will be €10 million which it is hoped will leverage further funding from banks and other private bodies. The Government has consulted relevant stakeholders and legislation will be required. The key to the success of the facility will be local involvement through the county enterprise boards or the BIT network which is heavily funded by the Department to the tune of €2.2 million. Involvement by First Step is crucial to the viability of all small companies. There must be due diligence prior to funding small companies. It is not just a matter of giving out loans; management skills, mentoring and development of the company must be taken into account. It is not a matter of giving it initial funding in the hope it will become profitable. Many companies can be made better even without being in receipt of funding. This is the first time the State has become involved in this worthwhile fund. The previous Government talked about it for a long period. We are in the final stages and the fund will announced within a short time.
There are 180,000 micro-businesses in the country, some of which employ up to ten people. The European Investment Fund programme has been open for tenders on its website since last March. How much of the funding has the Government drawn down to date? This is a serious consideration and the failure to answer the question shows a deep disrespect for the 180,000 businesses mentioned, of which ISME estimates 50% are struggling to secure finance. The world and its mother knows that credit is frozen and that this is damaging the economy. I want to know how much has been drawn down to date.
The Government has guaranteed a sum of €3.5 billion to small businesses through the two pillar banks.
How much of the fund has been drawn down to date?
The fund is part of the bigger picture. The Government does not-----
How much of the fund has been drawn down to date?
The Government has given €3.5 billion through the two pillar banks-----
From this fund?
No, through the two pillar banks. The fund is open to private intermediaries to draw down funding-----
Therefore, the answer is nothing, no money has been drawn down.
Please allow the Minister of State to reply.
First Step has used the fund very effectively to date. As the Minister, Deputy Richard Bruton, has correctly stated, the exports of Enterprise Ireland and Bord Bia supported companies are the highest on record. We have met the two pillar banks and viable businesses are receiving funding, despite what the Deputy says.
