Priority Questions
1Deputy Willie O’Dea asked the Minister for Jobs; Enterprise and Innovation with regards to his target to have 100,000 more persons in work in his action plan, the gross number of jobs he intends to create to achieve this target; the projected rate of unemployment he used as the basis of the plan for each year to 2016; and if he will make a statement on the matter. [11689/12]
View answerThe action plan for jobs has set a target of supporting the creation of 100,000 net new jobs over the period 2012 to 2016. Even in good times, businesses close and jobs are lost so, as the Deputy recognises, a significantly larger number of new jobs will clearly need to be generated on a gross basis over the period in question to achieve the target. Such jobs are not created by my Department and its agencies but by successful enterprises.
There is no reliable data published on gross job creation forecasts across the economy. However, we develop targets in respect of client companies of my Department's agencies. Over the period of the action plan for jobs, Enterprise Ireland and IDA Ireland are targeting the support of more than 100,000 gross jobs in client firms. Experience has shown that such job creation is matched by a similar number of approximately 100,000 connected jobs in the economy through the supply chain. Approximately 5,000 full-time jobs and more than 3,500 part-time jobs will be created by the county and city enterprise boards each year. Of course, further jobs will be created by companies which are not supported by the enterprise agencies but data are not collected on this in any systematic way.
The objective of the action plan for jobs is to transform the operating environment for business to make it easier to start up, expand, access finance and to find new markets. The plan is built around four key themes: supporting indigenous businesses; attracting more international start-ups and multinational companies; targeting sectors of potential; and improving competitiveness across the economy.
The action plan does not make projections of the rate of unemployment. It is seeking to influence the direction of growth and to change the trends in respect of enterprise, employment and of unemployment. Clearly, trends in global economics will have an effect on our trade and investment ambitions but we are stepping up the performance of enterprise and employment. It is about grinding out reforms to our policies, structures and systems, one by one, to create the environment where jobs can be created and sustained.
I am sorry. Maybe I was not paying sufficient attention but I did not quite get what the Minister said. How many jobs will be created? Page 7 of the document states that the ambition is to have 100,000 more people in work by 2016. The Minister seemed to recognise in his reply that if we are to have 100,000 more people net at work by 2016, obviously, we will have to create more than 100,000 jobs in between because we will have attrition of various sorts, as he mentioned. What was his gross figure again in order to achieve a target of 100,000 net? Did I understand him to say the gross figure was 200,000?
As I explained, we have a figure of more than 100,000 gross in respect of the agencies - IDA Ireland and Enterprise Ireland - and there is a figure in respect of county enterprise boards. There is also a figure which has been used as to the multiplier effect of one job - the supply chain impact. We are indicating approximately 250,000 across that set of the economy.
Of course, we are not setting targets explicitly - we do not have that sort of analysis - in respect of businesses which are not agency assisted. Clearly, they create gross jobs which would be over and above this. In terms of the ones within the remit of our Department, those are the figures - more than 100,000 in respect of direct and indirect impact and then topped up to 250,000 in all, taking in the county enterprise board structure.
The Minister is now telling us to believe that, as a result of this plan, 250,000 jobs gross will be created by 2016. Unfortunately, that is the third figure we have got because I think he said 200,000 previously. More important, a Minister of State in a different Department, Deputy Cannon, said on "Prime Time" recently - I do not have the date but I can get it for the Minister - that it would require the creation of 350,000 jobs gross, so where are we?
I wish to ask the Minister a few specific questions. Approximately how many people does he envisage being on the unemployment register by 2016 when this particular plan comes to an end? What is being presented as different about this plan is the regular policing, the quarterly reports. What sanctions does the Minister have in mind for people who are not performing as expected because we are not only talking about Departments, which must all perform in regard to some subjects, but about organisations such as Enterprise Ireland, Sustainable Energy Authority of Ireland, Forfás, the Department of Tourism, Transport and Sport, the company law review group, Fáilte Ireland, research funders and the prioritisation action group? What possible sanctions can be applied to those people? How could the Minister even imagine that the company law review group or all Departments would be embarrassed if some action that was supposed to be done within a certain period of time was not done?
The Deputy has raised a number of points. As I pointed out in my reply - I am sorry but perhaps I glossed over it - there is no reliable data on gross job creation in the economy. The CSO did a once-off study, which is worth looking at, where it estimated that in 2010, gross job creation was approximately 12%. I suppose that would be equivalent to a little over 200,000 jobs in that year. There is much job creation that is not captured by the agency work. No one has accurate projections in that area. What we are working on are the areas of policy which we control and the potential impact. Our ambition is to grow employment - that is central - not only gross, but to see more people net at work.
The Deputy raised issues as to how one introduces sanctions. Performance accountability will be a key feature throughout the public service and it will influence not only individual careers and promotional opportunities, but the allocation of budgets. It is also simply reputation. People in the public service want to be seen to be delivering good quality performance against best practice. The public servants I work with are up for that challenge. This is about setting benchmarks and recognising success when it comes. That is what we are seeking to do.
There is a huge energy across the agencies involved to deliver this and I believe we will deliver it. It is about people's reputation and their commitment to achieve things for the country. That is a big part of this and it is important that, from the Taoiseach down, the delivery is monitored, people are recognised for success and questions are asked about disappointment, and that it has impacts for other things like budgets and performance indicators which are applied to staff and everything else.
2Deputy Peadar Tóibín asked the Minister for Jobs; Enterprise and Innovation with respect to the new action plan for jobs, if he will detail the future relationship between county enterprise boards, local authorities and Enterprise Ireland; if his plan will necessitate the relocation of the physical enterprise facility to the local authority; if it will necessitate a reduction in the CEB work force; the overhead savings as a result of the reform; the future of the existing CEB boards; the way he will facilitate a reorientation of local authorities to ensure that they are enterprise focused in future; and the steps he will take to ensure uniform quality support for the small and medium enterprise sector following the amalgamation. [11687/12]
View answerThe new structure of local enterprise offices, LEOs, will build on the significant work done by the county enterprise boards to date. It will be achieved through the dissolution of the existing CEBs and the creation of a new micro enterprise and small business unit within Enterprise Ireland that will work with the local authorities to establish a local enterprise office in each local authority. The local enterprise offices will be staffed with a combination of local authority and CEB officials. The precise HR arrangements will be finalised as the process moves forward.
The aim of the proposal is to enhance the State services to small business at local level by delivering a one-stop-shop for small business; establishing a more integrated network between local and national enterprise support which will ensure high standards, uniformly delivered to benchmarked standards of best practice; offering a seamless service for small companies to take up the wider range of Enterprise Ireland programmes for companies with rapid growth potential; simplifying the structures that small businesses have to deal with; enlisting the local authorities into a more active role in small business support and local economic development; and encouraging innovative approaches to support small business.
In conjunction with the dissolution of the CEB legal structure, Enterprise Ireland and the local authorities will be tasked with the practicalities of setting up and rolling out a local enterprise office structure. There is clearly a lot of detailed developmental work to be done over the coming months to effect these changes and to put appropriate new structures in place. I will shortly establish a steering group chaired by my Department which will move this process forward and address all of the relevant issues. Clearly, it is essential that all relevant parties continue to work together to bring about this positive change as a priority and that the continuity of a high level of service to the micro-enterprise sector is preserved in the transition phase.
Today we found out that 7,131 young people, under 25 years of age, left the live register in the past month. Most of them left due to emigration and there is a strong view that we are entering into the times of the 1950s and 1980s with regard to the level of emigration. Some 76,000 people, or 1,300 every month, left last year. There is a view that county enterprise boards are the first line of enterprise development. They are what most young people have access to, given that they deal with small, start-up businesses. Hundreds of young people have used county enterprise boards. The amalgamation of the county enterprise board infrastructure into local authorities is dangerous. I do not say that it has no opportunity of working but there is danger. Local authorities have not been oriented towards enterprise in the past.
I ask Deputy Tóibín to frame a question.
In many cases, local authorities have been orientated against enterprise. Given the seriousness of the jobs crisis, which cannot be underlined enough, what resources will the Government put in place to reorient local authorities to ensure they have an enterprise culture? An enterprise culture will not be created overnight or in a year. Local entrepreneurs and small businesses see local authorities as the place to pay fees and rates.
I must call on the Minister to reply.
It is very important that this is done properly and that the necessary change in culture happens in local authorities. What will the Minister do to achieve that?
I could not agree more with the Deputy. The implication of this is vital. There are two dimensions, one of which is creating a strong small business unit in Enterprise Ireland, which will create excellence and standards, allocate budgets and hold local authorities to benchmarks of business friendly standards. There will be that level of engagement from a centre of excellence in Enterprise Ireland. Equally, local authorities are being enlisted to reform their small business units and county development boards and to orient themselves towards the needs of local enterprise and become more active in shaping local economic development. There are wins on both sides. There is access for small businesses to all programmes developed by Enterprise Ireland and oversight by a centre of excellence in Enterprise Ireland of enterprise culture and instruments. There is also a call to action within local authorities to deliver to small businesses according to the standards expected.
Like Deputy Tóibín, I meet businesses that complain about the response of local authorities. This is about reforming that and bringing local authorities to be part of the solution to the enterprise challenge. It is very exciting, with great potential for wins, which the Deputy recognises in his question while also saying bí cúramach.
The Minister mentioned that Enterprise Ireland will have a significant part in directing this process. The fears of Deputies is that regionalisation of administration often leads to uneven delivery of service. For example, Kildare gets nine times as much investment from the IDA as Meath. My view is that this is because it is delivered on a regional basis. If the driving of the new enterprise function in each county is regionalised by an Enterprise Ireland office, there is a danger that it will become uneven in its delivery.
Many third level institutions have incubation centres. Unfortunately, counties such as Meath do not have third level institutions or incubation centres. While this is being rolled out, the Minister should examine the savings achieved and ensure countries without a third level institution have an incubation centre.
Nurturing social enterprise and commercial enterprise at local level is vital. Much of what county enterprise boards and Enterprise Ireland do is demand-led. We must nurture but we must also see them come forward with proposals. There is a strong regional mandate of Enterprise Ireland to nurture businesses. In the south east, we put in extra resources to create a better seedbed for enterprises to grow and come forward. The IDA is a different issue but we can build up both, so that there are standards and benchmarks of expectation. Mentoring must come to a certain standard and the way companies are dealt with must increase to a certain standard. That will be built into the service level agreement between Enterprise Ireland and the local office. We also seek to engage local authorities in creating the environment in which businesses can thrive. It is a two-way process. We create incentives at both ends and we hope this is what will drive the matter.
What about incubation centres?
There are 105 Enterprise Ireland community enterprise centres.
I remind Deputies there are six minutes for each question.
3Deputy Seamus Healy asked the Minister for Jobs; Enterprise and Innovation in view of the fact that according to the Central Statistics Office, the Quarterly National Household Survey for Quarter 3 of 2011 shows that the total number employed in the economy declined by a further 20,500 in that period, his views that the outcomes of the QNHS on the total employed in the economy over the next year will be the definitive verdict on his action plan on jobs; and if he will make a statement on the matter. [11691/12]
View answerThe action plan for jobs has the objective of supporting the creation of 100,000 net new jobs over the period to 2016, with a longer-term objective of having 2 million people at work by 2020. The action plan does not pretend to be an instant solution to the scale of the unemployment problems we are facing. It is, rather, about addressing the fundamental requirements to enable businesses to start-up and grow. It is about grinding out reforms to our policies, structures and systems, one by one, to put in place the environment where jobs can be created and, most importantly, sustained in the long term.
In this context, trends in employment over the next few quarters cannot be the definitive verdict on the action plan. The plan will be judged by the successful implementation of reforms, the monitoring of their impact, the development of further actions in 2013 and beyond and the employment trends over the horizon of the plan to 2016.
We recognise that 2012 is going to be a difficult year due to the downgrade of forecasts in many of our export markets. Clearly, trends in global economics will have an effect on our trade and investment ambitions but we are trying as far as possible to be masters of our own destiny through the action plan for jobs.
The Government recognises that many problems in our economy must be fixed in order to put enterprise in the position to expand output, win new markets and employ more people. We are targeting sectors of the economy that can grow and we will work with employers and business representatives to identify what we can do better to maximise job creation.
This action plan differs from reports published by previous Governments, which failed to deliver due to the lack of determination on the part of Ministers to follow through on implementation. It is not a strategy document but a series of actions we have committed to delivering and is supported by detailed tables that identify the key steps to be taken each quarter and the people or agency responsible for delivering the intended outcome. These tables have been published and progress on the deliverables is being overseen by a monitoring committee comprising senior officials from the Department of the Taoiseach, the Department of Public Expenditure and Reform, my Department and Forfás.
Is it not a fact that this Government is a jobs destruction Government and that the number employed in the economy since the Government came to office has decreased significantly? The CSO figures for 30 June show a decrease of 4,000 jobs. The CSO figures for 30 September show a reduction of 20,500 jobs. Surely that is the definitive judgment on the so-called jobs budget introduced last year. Are we destroying jobs? Is it time for the Government to get involved in the direct creation of jobs and to forget about the idea that the Government is only there to provide the environment for jobs? It is time for the Government to recognise what has happened up to now has been a failure. It needs to get directly involved in the creation of jobs.
I do not know whether Deputy Healy got a chance to go to the Mansion House today, where 92 of the most exciting companies in Ireland committed to create 1,600 jobs over the next two and half years across every region. They are the sort of people who will create the economic future of this country. Their story needs to be celebrated more. It would do the Deputy a power of good to go down and feel the energy there.
The record does not show that the jobs initiative was a failure. As the Deputy knows, it cut VAT and PRSI rates for the tourism sector. We secured growth as a result. The employment figures to which he referred show there was growth. We are going through an extremely difficult transition. Some sectors grew beyond sustainable levels in this economy. We know about construction and banking, which grew to unsustainable levels. We now have to undertake the difficult task of rebuilding the sectors that can bring us growth in the future. That is what the action plan for jobs is about.
It is quite clear that up to 30 September last year there were 25,000 fewer jobs in the economy. They are black and white statistics from the CSO. It is an indictment of the Government. We all welcome any job announcements from any companies. Unfortunately, the record shows there has been an investment strike over the past few years by private funds. The ESRI is forecasting a reduction of 41,000 jobs in the economy over the next two years. On the basis of those figures, it is time for the Government to start creating jobs.
The Deputy knows the Government is constrained in its public finances. Effectively, the country has been in a form of receivership. Only one agency will lend to us, namely the troika, and we have to abide by certain stringencies that result from that. Within that, we are using the money we have extremely creatively. The strategic investment fund and NewERA are taking €250 million from the pension fund and leveraging it to a €1 billion fund which is available for infrastructural investments. The sort of quality investments that can improve our infrastructure now have a fund available to them. The rolling out of that into projects will be an important element.
A lot of the initiatives, such as the development capital fund and the innovation fund, are bringing in private sector money and making it available to companies that are starved of credit from the banks. Again, that is innovative in that it is bringing in investment money that is lying fallow and using it for companies with high potential. We have to box cleverer in this environment. There is not the scope for the huge bankrolling spending programme the Deputy feels ought to happen. It would be great if we could have that but we have to be cleverer about the way we promote employment, and that is what we are seeking to do.
4Deputy Willie O’Dea asked the Minister for Jobs; Enterprise and Innovation if he has carried out a cost benefit analysis, or an analysis of the effects on jobs and unemployment, of abolishing county and city enterprise boards; and if he will make a statement on the matter. [11690/12]
View answerMuch work has been done in advance of the decision to restructure and reposition the enterprise support model. The new structure of local enterprise office will build on the significant work done by county enterprise boards, as the Minister, Deputy Bruton, stated, to date. Therefore, the dissolution of county enterprise boards in their current legal format is not an end in itself and will be done in conjunction with the establishment of the creation of a new micro-enterprise and small business unit within Enterprise Ireland that will work with local authorities to establish a local enterprise office in each local authority.
The aim of the proposal is not just about abolition or dissolution, rather it is about developing and enhancing the State services available to small businesses at local level by delivering a one-stop shop and offering a seamless service for small companies to take up the wider range of Enterprise Ireland programmes for companies with rapid growth potential, which we saw in the Mansion House today.
The proposal will also simplify structures and enlist local authorities into more active roles in small business support and local economic development by dealing with the stacked costs of local government such as rates or water charges. It will establish a more integrated network between local and national enterprise supports which will ensure high standards are uniformly delivered and small business development is supported by appropriate benchmarking within Enterprise Ireland.
Immediate expected Exchequer savings will be modest and over a three to five year period will be in the order of €750,000. There will be significant new benefits for the micro sector, which is the most important aspect. The benefits and job potential of the new one stop shop for the small business sector are anticipated over time from the enhanced enterprise support model. There will be a new configuration of services at local level which will be very beneficial.
I thank the Minister of State for his explanation. The jobs plan implies there will be a combination of county enterprise boards, which are already in place, and people from business support units in local authorities. I appreciate what the Minister, Deputy Bruton, said about a steering group. He must have some idea about how the body will look.
For example, there are four people working in Limerick county enterprise board and five working on the business development side of Limerick County Council, but only one is working on enterprise. I am not sure whether the person is working full-time on enterprise, as most of the work is oriented towards community type projects. Will that be the totality of the staff? Will staff have to undergo some sort of retraining? A one stop shop implies that they will be able to get information on IT, export potential, public procurement, accountancy and finance, all in one place. Is that what is envisaged?
A one stop shop will be delivered. It is not rocket science to envisage that there will be supports such as mentoring. We know how effective the county enterprise boards have been to date. They will be working with local development units. The mandate of job creation will be under the Minister, Deputy Bruton, led by Enterprise Ireland.
This will be managed by Enterprise Ireland, working in partnership. We do not need extra staff to deliver the service. Rather, the mindset of all staff and local authorities should be about working together. There is a local development board in every county council and some very fine people are on them. Social enterprise is taking place in every county. Community enterprise is regenerating communities.
Putting all staff together in a one stop shop facility means they can advise, recommend or work with other bodies, such as third level institutions. If people have an idea and want to develop a concept they can go to a front of house facility, whereas until now the county enterprise board structure was very much geared towards manufacturing. We want to develop the range of services available, such as mentoring and accounting, and redirect people to where they can avail of them. It is about recognising the potential and tapping into it. It is a huge opportunity for enterprises in every county to have a one stop shop where they can get advice to develop businesses.
I could not agree more with the Minister of State. It is a wonderful concept. I am trying to ascertain how it will work in practice. He seemed to imply no extra staff will be available. The staff I have spoken to in Limerick told me they would not have the range of expertise to handle such inquiries. I am not referring to county enterprise board staff, rather to those they will presumably join in the local authority. Extra staff or very substantial retraining is required.
When does the Minster of State envisage the new body will be put in place? Will the new local enterprise centres have any power to give grants, equity funding or loans towards the establishment of businesses?
Will it simply be a signposting body advising one to apply to Ennis, Cork or Dublin, for example?
In a letter to Deputy Martin last week on micro-enterprise, the Taoiseach said that under the action plan for jobs, it is proposed to establish a new one-stop-shop micro-enterprise support system. We have all understood micro-enterprise to involve ten or fewer jobs. Will the agency be advising enterprises with between ten and 50 employees, which fall into a gap between Enterprise Ireland and the county enterprise boards? Will its remit extend to them?
On the last point, where there has been a lacuna affecting enterprises with between ten and 50 employees, Enterprise Ireland will have overall responsibility and a mandate regarding the staff employed in local government and the enterprise staff in their new role. They will very much fall under the remit of the Minister, Deputy Bruton.
It is very important that we develop expertise. There is considerable expertise in every county. When the potential in third level colleges and those who are currently working within the enterprise structure is taken into consideration, it will be apparent that these people will still be in the service. People with expertise in local government can tap into the voluntary sector. Under the current structure, people give of their time voluntarily on the county enterprise boards and have been very effective to date in delivering sustainable jobs in small communities. We hope to expand beyond this and offer a host of enhanced services that include companies that were excluded up to now.
With regard to the timeframe, the Minister, Deputy Richard Bruton, will be bringing forward legislation as soon as possible on the dissolution of the enterprise boards and the setting up of the new structure. The Government is determined to roll out the service as quickly as possible. If we are talking about kick-starting the 200,000 small companies which generate €90 billion in the Irish economy, we must take these points on board. Since my appointment, I have been greatly encouraged by the determination of Irish companies, including small businesses with brilliant ideas and which want to commercialise them.
The Deputy referred to expertise. The micro-finance fund will be announced. It will be geared specifically towards those with new ideas to grow jobs. As the Minister stated correctly, this proposal involves a fundamental change in the roll-out of services locally. It involves a big difference of mindset. We are committed to ensuring that people with ideas will be supported in every possible way.
5Deputy John Halligan asked the Minister for Jobs; Enterprise and Innovation his views on whether it would be beneficial to the State to sponsor struggling small and medium businesses with a view to encouraging employment; his plans to liaise the Department of Social Protection in relation to this matter; and if he will make a statement on the matter. [11744/12]
View answerSupports to business by successive Governments over many years have focused on supporting viable businesses in the manufacturing and internationally traded services sectors, where the benefits to the economy of such supports significantly exceed their cost. In continuing that approach, this Government's objective is to facilitate the creation and maintenance of the maximum number of sustainable jobs in the economy by improving the operating environment for business and focusing on companies that demonstrate growth potential.
The Action Plan for Jobs 2012, which was published on 13 February, sets out a range of measures which are designed to support new business start-ups, improve enterprise competitiveness and help firms to grow. Small and medium enterprises will benefit in particular from measures in the action plan. These include the establishment of a new one–stop–shop structure for micro-enterprise support. Also included is the roll-out of the micro-finance fund for small new start-ups. The fund will go live following the finalisation of its delivery structures and the scheme's approval by the European Investment Fund.
Another measure is the introduction of a new temporary partial credit guarantee scheme, which will address the problem of access to finance for viable SMEs that do not meet the normal lending criteria of the banks. This scheme will go live as soon as possible following the enactment of primary legislation in Quarter 2 of 2012. Other measures include the expansion of mentoring schemes, particularly between multinational companies and SMEs, and measures to improve access to public procurement opportunities for SMEs.
In addition, the south east action plan, which was launched by the Minister, Deputy Bruton, on 2 December last, contains specific actions to address the unemployment problems affecting the south east. The plan identifies many actions that can help deliver on that ambition of having a stronger local enterprise base. There are challenges for all agencies in the region to help build up the region's competitive advantage and then to promote it in a co-ordinated manner.
Additional information not given on the floor of the House.
The Action Plan for Jobs 2012 is part of a wider, whole-of-Government response to the jobs crisis, which includes the recently published plan for labour market activation, Pathways to Work. Both documents are fundamentally linked and recognise the need to reform our policies and structures to secure long-term and lasting results for our enterprise base and for job-seekers.
The action plan sets out over 270 measures to be implemented this year to support job creation. Pathways to Work will reform the public employment services and the further education and training services to facilitate people to access the job opportunities that become available. Under the Pathways to Work approach, over 85,000 job experience and work placements will be made available by the Department of Social Protection this year, with a further 457,000 training and education places available through the Department of Education and Skills. These initiatives will impact positively on all regions of the country.
Statistics show that over 1,400 businesses, medium to small in size, went bust over the past two years. According to the Central Bank, 30% of all loans to SMEs are in trouble. Those who could obtain loans are in trouble. In the business section of The Irish Times during the week, it was stated a leading Irish supplier and installer of small-scale renewable energy systems has turned to the United Kingdom to expand his business. His reason is the lack of a feed-in tariff or Government support for the industry. He states, “In many cases, UK producers who availed of a feed-in tariff and fixed their costs have taken their market share, in contrast to their Irish counterparts”. He states the number of mushroom growers in Ireland two years ago, 400, has dropped to 60.
The job creation programme states specifically:
Job creation is central to any recovery strategy. Every person who leaves the dole and goes back to work reduces the deficit by an estimated €20,000, spends on average an additional €15,000.
If it costs between €22,000 and €35,000 to keep somebody on social welfare, surely innovative thinking outside the box is required. I refer to the sponsoring of small businesses, which are not paying reduced rates or rent, as is evident in my constituency. Would it not make sense to sponsor a business at a reasonable rate with the amount required to keep somebody on social welfare? We could immediately take 10,000 to 20,000 people off social welfare.
I take the point the Deputy is raising. We are being imaginative in ensuring there is a micro-finance fund for small businesses. The new partial credit guarantee scheme is designed to help the SME sector. If one talks about the direct subsidisation of a business - I take the point made by the Deputy on the encouragement or retention of employment within existing businesses - one must be mindful of the consequences. Where there are two companies trading in the same sector, one thriving and the other not, and one supports directly the one that is not thriving, one must realise there are permutations regarding State aid rules on direct subsidisation. We are, therefore, seeking to create the types of programmes to which all businesses will be able to subscribe, such that we can try to retain employment.
In the two types of businesses to which the Deputy alludes, the phenomenon he described could be seen a consequence of a direct drop in consumer demand, which is having a major impact. We must also factor that into the equation. The Deputy's point is well made but we are trying to address the problem through programme supports and direct-credit supports for companies that are thriving and will survive.
I am not critical of the jobs initiative in its entirety, as the Minister of State knows and as I have said publicly. In Pathways to Work, there is an initiative to pay private companies thousands of euro in taxpayers' money for each person taken off the dole. Why do we not turn that on its head? When small businesses' incomes begin to decline, their first step is to let part-time people go. I have dealt with a small business in the south east in which a husband and wife work 70 or 80 hours per week for a very small wage. They would be better off on social welfare. They say they must work these hours because they had to let somebody go, the paying of whom represented a considerable cost. I urge the Minister of State to think outside the box and sponsor employees with the money paid to social welfare recipients.
To be fair and objective about this, we are thinking outside the box. Research and development tax credits will encourage greater business growth.
Yes, I accept that.
The Revenue job assist scheme will also help, while PRSI programmes entice employers to retain employees and there is a tax break for that purpose. On the demand and supply side we are trying to encourage companies to retain people in jobs. It is an extremely difficult thing to do because one must adhere to State-aid rules in doing so. We have been imaginative in trying to get people back into the work force through labour market activation measures, including the pathways to work scheme. We will stay on that course. The essential point in the Deputy's question concerned a direct subsidy to individual businesses. We are trying to take a more imaginative view on that by putting in place the temporary credit guarantee scheme and the micro-finance fund. In addition, we are encouraging employers through tax breaks and PRSI credits. That is the way to stimulate growth.
