Wednesday, 4 July 2018

Questions (1, 2, 3, 4)

Joan Burton

Question:

1. Deputy Joan Burton asked the Taoiseach when Cabinet committee A (economy) last met. [26519/18]

View answer

Mary Lou McDonald

Question:

2. Deputy Mary Lou McDonald asked the Taoiseach when Cabinet committee A (economy) last met; and when it is scheduled to meet again. [27580/18]

View answer

Brendan Howlin

Question:

3. Deputy Brendan Howlin asked the Taoiseach when Cabinet committee A (economy) last met; and when it plans to next meet. [27721/18]

View answer

Richard Boyd Barrett

Question:

4. Deputy Richard Boyd Barrett asked the Taoiseach when Cabinet committee A (economy) last met. [29395/18]

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Oral answers (27 contributions) (Question to Taoiseach)

I propose to take Questions Nos. 1 to 4, inclusive, together.

Cabinet committee A held its first meeting on 12 September 2017. The committee covers issues related to the economy, jobs, the labour market, competitiveness, productivity, trade, the Action Plan for Rural Development and the digital economy and pensions. There has been significant progress on these issues this year to date, including publication of the roadmap for pension reform, publication of the Action Plan for Jobs 2018 and the review of Enterprise 2025, the Government's medium-term enterprise policy.

The last meeting of the Cabinet committee took place on 18 January and the next meeting is scheduled for 9 July.

I am particularly delighted by the very significant continuing fall in the unemployment rate, which is currently at approximately 5%. However, between 11% and 12% of young people under 25 are unemployed at a time when IBEC has stated that there are 80,000 skills shortages, in particular in the construction industry. This reminds me of the period when Bertie Ahern and Mary Harney were in Government and went around the world advertising for skilled people to come to Ireland while a significant number of Irish people at home lacked the skills to be able to take up those jobs. Does the Taoiseach plan to leave a key group of young Irish people sitting at home while Ireland again sends recruiters around the world to entice people here? That seems to be the Government approach.

I do not know if the Taoiseach would be shocked or concerned to discover that there are significantly more than 700 unemployed young people in the constituency which he and I represent. In the neighbouring constituency of Dublin Central the figure is far higher. I am concerned that the Government has forgotten about people in areas such as Dublin West and Dublin Central who could find training that they would enjoy and prosper from but cannot do so because of the cap on further education places. The Government considers skills something to be sourced from abroad rather than developed in our own young people who would go on to get traineeships or apprenticeships, go to college and become completely independent in terms of employment and income for themselves and their families, should they have a family.

I share Deputy Burton's concerns in regard to skills development and valuable pathways for people, younger people in particular, to acquire the skills they need and which are also needed by the economy at this time.

I welcome the fact that the living wage technical group has recommended a 20 cent increase in the living wage. I note that recommendation is largely due to price inflation in housing and accommodation. It is past time that the Civil Service and public sector, as leaders in good employment practices, ensured that each of their employees earns at least the living wage.

I also wish to raise the issue of the gender pay gap, which remains one of the most stark and persistent reminders of the continued inequality faced by women in the State. The programme for Government committed to addressing the issue but progress in that regard has been painstakingly slow. The latest statistics show that the problem is getting worse. Recent figures from the Central Statistics Office indicate that, on average, women are paid 14% less than men compared with a 12% difference in 2012. That deterioration and discrepancy is unacceptable. It sends a clear message that the work done by women is somehow less valuable and less valued than that done by their male counterparts and that must be tackled head on. As the Taoiseach is aware, women play as vital a role as men in our workplaces but that is not reflected in their pay or position in the labour market. It makes a joke of the concept of equal pay for work of equal value, which has been a central tenet of domestic and European law since the 1970s. When does the Taoiseach intend to introduce the Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill? What other measures does he propose to tackle this issue?

The Government has decided to provide only an additional €800 million of fiscal space for new measures next year. The arbitrary fiscal stance taken by the Government is that €500 million will be set aside for the so-called rainy day fund that is likely to be invested abroad and a further €900 million will be unspent. Some €2.6 billion will be added for previous commitments which are already accounted for. The Taoiseach stated during Leaders' Questions that he envisages a tax package forming part of the additional spend. Is it his view that the ratio of 2:1 on additional spend to tax will be reflected in that? If that is so, will that 2:1 ratio include the €2.6 billion of commitments made on additional capital, public pay and demographics which are embedded in the numbers for next year?

I have been seeking clarity on the rainy day fund for some time. Where will the fund, comprising €500 million, be placed? Is the figure the Taoiseach gave to the House of a deficit target for next year of 0.1% of gross domestic product, GDP, a sum of approximately €250 million to €300 million, accurate? Is it his intention to borrow that sum to put it aside? That does not make any sense to me.

I wish to ask the Taoiseach about precarious employment, the creation of meaningful jobs and, in particular, the large amounts of public money being put into the film industry. I do not expect him to have all the answers here but I ask him to give the matter serious consideration. Some €70 million per year is put into the film industry through tax relief and film board grants. At a meeting of the Joint Committee on Culture, Heritage and the Gaeltacht in January, representatives of Screen Producers Ireland and the Irish Film Board stated that the investment has generated 17,000 whole-time-equivalent jobs. I do not know if the Taoiseach has seen the very long Olsberg report which was issued last week and shows that there are nowhere near 17,000 jobs in the Irish film industry. That confirms the statements of workers in the industry, who have recently protested about the amount of money put into it in view of the fact that there are virtually no permanent jobs, there is no continuity of employment, and there is widespread bullying, harassment and victimisation of people who ask for their rights and so on in it. A report commissioned by Screen Producers Ireland shows that the film industry, which receives €80 million in public funding per year, does not provide 17,000 jobs but, rather, there are 7,000 direct jobs in film, television and animation. When one strips out RTÉ, TV3 and so on, there are 3,000 whole-time equivalents in the film industry. Those are not full-time jobs because those in the industry work from project to project. For €80 million we might be getting 2,000 totally precarious jobs.

I would love it if the Irish Film Board or Screen Producers Ireland would provide clarity on this issue. How many people are working in the film industry in Ireland today, 4 July? It is likely that there are almost no people working in Troy Studios, possibly ten to 15 in Ardmore Studios and possibly approximately 100 elsewhere, all of whom are on project-by-project contracts. In the context of €80 million in public funds going into the industry, does the Taoiseach believe it is acceptable that there is almost no permanent continuous employment or even some sort of guarantee for people in the industry that they will get employed in the next project?

The national risk assessment has identified Brexit as the number one risk to the economy and it is one which is becoming more ominous by the day. During both Taoiseach's questions and European statements last week, the Taoiseach and his colleagues failed to answer any of the specific questions put to them by the Opposition about their strategy and the reason the June target the Taoiseach talked about for six months was missed. Subsequently, the Taoiseach told journalists that he is preparing for a no-deal hard Brexit and not preparing for any measures on this island. I do not disagree with that. We should have been preparing for a hard Brexit a long time ago but the Taoiseach should outline here what exactly is involved. Will he state if he has discussed this matter with the European Union and if they have agreed to this particular scenario?

Further, on Friday, the Taoiseach stated that it is unrealistic for the backstop to apply to the whole of the United Kingdom. That is in direct opposition to his statement of 8 December last and subsequently that explicitly said that the backstop provided a mechanism for the United Kingdom as a whole. Will he explain when he changed his mind on this matter?

To pick up on the last point first, what we are doing in terms of preparing for the possibility of a hard Brexit, which we believe is unlikely but for which it is prudent to prepare, is contingency planning for different scenarios. We should be in a position to share that in the next couple of weeks. It is very much contingency planning for all sorts of different scenarios but the most obvious one that may arise if the United Kingdom leaves the Single Market and the customs union, as it intends to do, is that sooner or later we will need to reinforce our customs and Revenue checks in ports and airports, so it is in that space. We will be happy to share that when we are in a position to do so.

On the UK backstop, again, I am very happy to clarify that. What I said was that a UK-wide backstop could apply to customs but what could not apply was a UK backstop where the four freedoms are separated and that that exceptional scenario could only be made for-----

I was there in Brussels so I know what I said, and certainly what I meant. I believe it is what I said.

No. The Taoiseach said it here last December.

No. The Deputy is suggesting there is a conflict between what I said last December and what I said in Brussels last week. I am saying there is not. What I said in Brussels last week was that a UK-wide backstop could apply to something like customs but could not apply if there was to be some sort of division of the four freedoms. The European Union is willing to make exceptions for Northern Ireland to allow the European Single Market to apply to Northern Ireland when it comes to goods and services but not other items. However, such an exception would not be made for the UK as a whole. That is at least what I was trying to say, and I am fairly sure it is what I said, but I am happy to clarify that.

Going back to Deputy Burton's comments, I am pleased that there was a welcome for the fact that the unemployment rate is now down to 5.1%. It was 16% at one stage. The long-term unemployment rate, which is people out of work for a year or more, is about 2%.

The youth unemployment rate is down from over 30% to 10% or 12%. It has been the case in Ireland for decades, and across the world, that youth employment has generally been about double the national rate. There is a reason for that. It is because when youth unemployment is calculated, people who are in education or training are not included so it is a different measure of how the workforce has done. For example, very few people in their 40s or 50s are in education and training. If we take people who are under 25, a huge number of them, perhaps even more than half of them, are not in the workforce. They are in education or training. The unemployment rate, therefore, is based on a minority of people between the ages of 16-----

The unemployment rate is based on people not working. The Taoiseach should know that.

-----and 25. If we move more people under 25 into education and training, the unemployment rate as a percentage potentially increases because of the way it is calculated. Those people get taken out of the calculation because they are not considered to be part of the workforce. The standard unemployment rate is calculated as a percentage of the workforce. There is a difference between percentages and raw numbers but I can provide a written briefing for the Deputy on that if I have not explained it properly. It is not that young people are more likely to be unemployed. It is that the denominator is different because so many young people are involved in education and training, they are not counted as part of the workforce. That makes the percentage higher, if not the probability of unemployment.

When it comes to the minimum wage, the Government takes advice from the Low Pay Commission, a statutory body established by the Oireachtas to make recommendations on minimum wage. We have increased the minimum wage twice during the period of this Government. The living wage is calculated differently. There is no input from employers in that, which I believe is a weakness. If a minimum wage or a living wage is being calculated, it should have the input of employers as well. Ultimately, they are the employers. They are stakeholders. Their views do matter, and their views should be heard. Ultimately, they create the jobs and they can advise us as to whether jobs may be put at risk.

The living wage does not give adequate regard to the views of employers. It also takes into account housing costs, which are very high, but it is not the case that everyone has housing costs. There are people who own their home. There are people who live at home, for example. It is based on certain assumptions which are different from those made on the minimum wage, which is drawn up by the Low Pay Commission which advises Government on that.

Cabinet has approved the heads of a Bill on the issue of the gender pay gap. The legislation will require companies of more than 250 employees initially, moving to companies of more than 50 employees, to calculate the gender pay gap in their companies and publish it. Having published it, I imagine they will be required to explain it, particularly if we see disparities from one company in the same business to another company in a similar business because there will be pressure brought on as a consequence of transparency to deal with it.

We have equal pay for equal work and there are often other reasons there is a gender pay gap. It is not necessarily down to a female worker getting paid less than a male worker for the same work. It is often down to women not getting a fair go when it comes to promotion or not being able to rise up the ranks of a company or business because they are not getting a fair number of promotions. Also, women often work shorter hours than men because women often take on more of the caring responsibilities than their partners. That is something companies cannot change but we can change through public policy.

I asked a question about the film industry.

The film industry, Taoiseach.

I asked about the budgets. The Taoiseach started at the back and then went to the front but left out the two questions in the middle.

If the Ceann Comhairle can give me another few minutes, I will go through them.

Yes, Taoiseach. Go ahead.

On the budget, the total budget package for 2019 will be in the region of €3.5 billion. The vast of majority of that is committed but it is important to remember how it is committed. There is €1.5 billion in additional capital spending for public infrastructure, housing, broadband, healthcare, climate action and all those areas. There is additional funding for health and education, especially having regard to demographics, the increase in the number of children at school and the number of patients that will be seen next year. There are the increases in public sector pay, with pay increases for nurses, doctors, teachers, civil servants and local authority workers all programmed in. That has to be paid for. There is also the full-year cost for elements such as the welfare and pension increases, which kicked in in March last year. The vast majority of that is committed but it is committed to good measures. We stand over the fact that we committed that early.

I do not believe everything has to be announced on budget day. There is a different approach now-----

Demographics are always done-----

-----in that we have announced measures in advance, for example, particularly on capital spending so that there can be proper planning.

It was done in the last five programmes.

On the tax package, the focus will be on income taxes. Last year, we paid for the reduction in the USC and the reduction in income through tax increases elsewhere. It was paid for through measures such as the sugar tax, for example, and the increase in stamp duty on commercial property. We paid for the tax package last year through tax increases in other areas. I imagine, although it is far from decided yet, that we will adopt a similar approach, which means the entire budget package, never mind the 2:1 model, will be 10:1, 20:1 or 100:0 when it comes to public spending because the focus is very much on increasing spending on public services and public infrastructure. Unlike last year, it may be the case that the tax package is fully funded by tax increases in other areas. That is the approach that was taken last year, but as I said, the budget is far from negotiated yet and far from written, and a lot can change between now and then. Anything greater than a package of €3.5 billion would require more borrowing. I hear people talk about there being more money available. It is only available if we borrow it or if there is more fiscal space that could be used. Again, it can only be used if we borrow it. It is very much my view-----

Or raise it through-----

It is a different proposition to raise it through additional taxation but others, not Deputy Boyd Barrett, in fairness, are arguing that we should borrow more.

More borrowing is the wrong policy at the moment. The economy is growing fast, tax revenues are very buoyant and we are approaching full employment. Now is not the time to increase borrowing. Now is the time to balance the books and pay down the debt.

The Government already borrowed to set it up.

That is the responsible thing to do, in my view. On the rainy day fund, it is intended that will be managed by the NTMA.

On the film industry, I have not seen the report that Deputy Boyd Barrett mentions. He indicated there are few or no permanent jobs in the film industry. I suspect that is related to the nature of the industry in many ways. Film projects are discrete projects and television series are often discrete series. Jobs are available for a year or another period of time. The nature of the film industry and programme production is that projects are very often discrete and jobs are not for life. In terms of tax incentives, we are operating in a very competitive environment. That is the truth of the matter. Many different countries have tax incentives to encourage the film and audiovisual industries. Without such incentives, we could lose out entirely. If we were to remove tax incentives, rather than having a better outcome, we would end up with fewer jobs and less investment all around.