asked the Minister for Finance if he will estimate the additional employment created as a result of tax changes introduced in the past year.
Ceisteanna—Questions. Oral Answers. - Tax Change Effect on Employment.
2.
The fiscal measures, including changes in the tax code, introduced over the past year reflect the Government's determination to ensure that the environment created by their tax and incentive policies is conducive to the creation of employment in the private sector. It is not possible to quantify separately the impact of taxation measures on employment creation. Although some of the measures, in particular the various reductions in VAT, directly stimulate employment, other measures, such as those designed to improve incentives, operate indirectly and take longer to achieve their full impact on employment. Moreover, incentive policies, including the new scheme of house improvement grants introduced in the October package, are simultaneously acting upon employment.
It is evident from the trend of the unemployment figures that there has been a considerable improvement in the employment position. The average year-on-year increase in the live register for the first three months of 1986 was less than 6,000. This is the best performance over any comparable period since 1980 and contrasts with a peak average increase of 41,500 in the first quarter of 1983. The further tax changes introduced in the 1986 budget and the provisions contained in this year's Finance Bill should help to consolidate and reinforce this welcome trend.
Would it be a fair summing up of the Minister's reply to say that the answer is minus 6,000, or can the Minister direct us as to what extent any employment whatever has been created by the fiscal measures adopted in the past year and, indeed, in earlier years? Is it not a fact that, whereas perhaps the rate of increase in unemployment has slowed down, nonetheless unemployment is increasing? Consequently, if they are directed towards creating employment, these fiscal measures have not had any success whatsoever. The position has been the reverse.
I cannot understand what the Deputy is talking about.
The Minister and the Deputy do not speak the same language.
When we started off, unemployment was increasing at over 40,000 a year and it is now down to an increase of 6,000 as a result, in part, of the policies to which Deputy Taylor has referred.
The objective is a reduction.
I think that is a good performance. It indicates that, if that trend continues, unemployment will be reducing soon, which is what we are aiming at. I do not think statistics would give any substance at all to the inference contained in Deputy Taylor's question that these measures have not worked. It is quite the opposite.
(Interruptions.)
I suggest that the Minister should not make a comparison with the statistics of 1983, which were almost disastrous, to claim credit for what is happening in 1986.
Following on 1982.
Would the Minister acknowledge that if we were to see the same rate of increase in 1986 as we had in 1983 or 1984, or anything near it, effectively we would have nobody at all at work within a five year span? The rate of increase must, of course, drop because one is dealing with a diminishing labour force.
A question, Deputy, please.
Would the Minister acknowledge that, in terms of a diminishing labour force, a 10 per cent increase on 240,000 unemployed is outrageously worse than a 15 per cent increase on 100,000? Claims by the Taoiseach of a decrease in percentage terms are just irrelevant. Is it not the reality, as Deputy Taylor is pointing out, that we are still seeing an unacceptable increase in a totally unacceptable level of unemployment? Is it not also a reality that the Minister's predecessor in each budget statement, but notably the latest promised in each of the years 1983 to 1986, inclusive, that the consequence of the budget measures would be a reduction in unemployment and the creation of real employment? The reality has been quite the reverse.
I do not know if we are living in the same world at all.
We are not living in the same world.
My understanding is that the labour force is increasing and if one can achieve a situation in which unemployment is not increasing——
Numbers at work.
The labour force is not the numbers at work. The labour force is the total number of people available for work or working. The labour force is increasing; against that background, to achieve a situation in which unemployment is not increasing indicates that one is increasing employment. I am confident that there is an increase in employment at the moment in the economy and very soon or certainly within the next year or so — I hope to see that resulting in an actual reduction in the number of unemployed.
In view of the Minister's comments about a considerable improvement, would he confirm four figures for me? This time last year we had a figure of 230,000 unemployed and now it is 237,000; secondly, there is an increase in employment which is well below the growth in the labour force, despite what the Minister says; thirdly, unemployment in manufacturing industry is 21 per cent; fourthly, manufacturing employment has come down 30,000 in three years. In view of those four figures, does the Minister still consider the situation to be one of considerable improvement?
Of course, it is a matter of considerable improvement. If when we came into office, as a result of the heritage of the Deputy opposite and his friends in office, unemployment was increasing at over 41,000 and we have got that rate of increase down to 6,000, we are doing extremely well.
107,000.
We are doing extremely well and we do not have anything to apologise for to Deputy Brennan or any of his friends opposite. Of course it is not good enough and we would like to reach the stage where unemployment would be reducing. That is the objective of our policies. Given what we started with, what we inherited, and what we have already achieved, the signs are that we will be in a position within the reasonably near future to see unemployment come down. The best way to ensure that that happens is to continue the policies this Government are implementing which are having the desired result.
Does the Minister regard an increase of 70,000 on the unemployment register as an achievement?