Dáil Éireann díospóireacht -
Thursday, 14 Nov 1991

Vol. 412 No. 7

Ceisteanna—Questions. Oral Answers. - Job Creation.

Pat Rabbitte

Ceist:

8 Mr. Rabbitte asked the Minister for Industry and Commerce if he will outline in relation to the commitment given in the Review of the Programme for Government to the development and upgrading of our indigenous industrial base as the key to generating real jobs, the specific initiatives which are planned by the Government, in view of the record levels of unemployment reached in recent months and the fact that the Labour Force Survey has shown a decrease of 5,000 in those at work; and if he will make a statement on the matter.

Michael Creed

Ceist:

9 Mr. Creed asked the Minister for Industry and Commerce if he will outline the specific measures, if any, which he intends to take to tackle the problem of unemployment.

Tomás MacGiolla

Ceist:

27 Tomás Mac Giolla asked the Minister for Industry and Commerce if he will outline the anticipated level of job creation during the current year; and if he will make a statement on the matter.

Peter Barry

Ceist:

54 Mr. Barry asked the Minister for Industry and Commerce if he will outline the specific measures taken to promote growth in industry, referred to in page two of the Review of the Programme for Government published on 18 October 1991.

Bernard J. Durkan

Ceist:

58 Mr. Durkan asked the Minister for Industry and Commerce if he will outline his proposals for job creation in light of (1) unprecedented unemployment levels and (2) increased numbers of young people coming on to the job market; and if he will make a statement on the matter.

Mr. O'Malley

I propose to take Questions Nos. 8, 9, 27, 54 and 58 together.

The overriding objective of the Government is to promote a comprehensive series of measures that will effectively tackle unemployment, as spelt out in the Programme for Government. These measures include firm management of the economy and of public spending, projobs tax reform and specific measures to promote growth in particular sectors of the economy such as agriculture, forestry, marine, tourism, modern industry and services.

In relation to the development and upgrading of our indigenous industrial base, I would point out that I initiated a comprehensive review of our whole industrial policy last summer. The Government are committed to acting in a speedy and decisive manner in relation to the findings of this review.

As regards the anticipated level of job creation this year, in so far as manufacturing industry and international services are concerned, the overall jobs target for the three year period of the Programme for Economic and Social Progress is 60,000. It was pointed out in the programme that recession in the UK and US may retard developments. Because of this, it was pointed out that there may be fluctuations around the planned annual job target of 20,000. Final figures for job creation this year will not be available until the State Development agencies have completed their annual employment surveys some time in December. However, latest indications show an outturn which, bearing in mind the international situation, will substantially meet the target for 1991.

It is essential that the House should appreciate the difference between job creation and the current unemployment figures. There are particular demographic factors, including the age structure of the Irish population, the natural increase in the labour force coupled with net migration flows, and participation rates that have combined in the past year to give an erroneous impression of the underlying state of the Irish economy. The Irish economy must generate proportionately more jobs annually than any other EC country just to hold unemployment at current levels. This creates major difficulties in making inroads on reducing unemployment.

The preliminary labour force estimates to end-April 1991, show that employment in industry and services increased by 50,000 since 1987 and 29,000 since 1989. This was clearly not enough to absorb growth in the labour force but it is essential now that we continue to maintain the policies that underpin development. The creation of sustainable jobs is a long term process and one which cannot be fulfilled by short term stop gap policies. The OECD has said in relation to Ireland: "persistence with the considerable policy efforts already embarked upon provides the best chance for the continuation of the impressive economic performance achieved over the past three years."

The Government are determined to persist with their policies, in consultation with the social partners, so as to create and maintain the conditions for sustained employment growth.

Mr. Rabbitte

Whatever about the erroneous impression to which the Minister has referred, the fact remains that we still have 260,000 people unemployed. Deputy O'Malley is the Minister for Industry and Commerce, the Minister primarily responsible. I should like to ask him whether he was surprised at the revelation in the employment labour force survey that there were 5,000 fewer people at work last April. Will he agree, in the light of the acknowledged failure of the indigenous sector of Irish industry, that the commitment in the Programme for Government sector is extremely vague and that the time has been reached when the House should be discussing specific measures to mount an asault on the unemployment problem?

Mr. O'Malley

I am well aware, as is every member of the Government and, I suppose, every Member of the House and every person in the country, of the very severe unemployment figures. However, I sought to contrast that side of the equation with the employment creation side, which is relatively satisfactory. I say "relatively satisfactory" in the sense that by comparison with any other European Community country our rate of job creation is exceptionally good. The fact is, however, that we must achieve a rate of job creation way in excess of any other European country in order to even stand still. Given the world's current economic climate and the undoubted recessions that exist in two of our major trading partners, 1991 has been a difficult year. There are, tentatively at any rate, rather better prospects for 1992. We cannot be sure of that until some time in 1992.

Mr. Rabbitte

The Minister referred to a "relatively satisfactory" performance and said that our rate of job creation has been exceptionally good by comparison with our European partners, but surely the facts of the matter are, as exposed by the labour force survey figures, that 5,000 fewer people were at work — we are talking about people at work not the number of unemployed——

An Ceann Comhairle

We are having repetition.

Mr. Rabbitte

Last April there were 5,000 fewer people at work. I am asking the Minister, in view of boasts by various Ministers about the number of people at work showing an improvement, whether it has shown a retrogressive step and that that is a cause for alarm and no cause for congratulating ourselves on a relatively satisfactory performance.

Mr. O'Malley

I am trying to put the matter in perspective. The Deputy will know that the labour force survey showed up an abnormal decrease in agricultural employment in the past year. Why that was I am not quite sure; it may have something to do with the Common Agricultural Policy reforms. The decrease was about three times greater than usual and for that reason it has had an impact on the overall figures.

I gave the Deputy the figures for the increase in industrial employment, industrial jobs created and international traded services. They are the matters in respect of which I hold overall responsibility. I cannot deal specifically with other aspects such as agriculture.

Mr. Creed

The Minister in his reply made specific reference to control of public spending and efforts to promote growth in the economy as a vehicle to generate the necessary employment to reduce unemployment figures. I suggest to the Minister that since the late eighties we have had high growth rates in the economy and control of public expenditure and together with that we have had unprecedented levels of emigration and increased unemployment. Will the Minister comment on his assertion that those measures alone will generate the jobs necessary? I also wish to refer to the point made by the Minister about the growth of indigenous industries being a solution to unemployment problems. The current Common Agricultural Policy reform proposals, it is estimated by independent analysts, will cost 16,000 PAYE jobs, not to mention the jobs lost in farming.

An Ceann Comhairle

The question is overlong. Let us have brevity.

Mr. Creed

Will the Minister comment on those matters?

Mr. O'Malley

The Deputy is not correct in saying that we have had very high emigration in recent years.

Mr. Creed

At least 50,000 people.

An Ceann Comhairle

Questions have been asked, let us listen to the replies.

Mr. O'Malley

It appears that in recent years we have had almost no net emigration; in fact, we may well have had net immigration in recent times.

Mr. Creed

That is a very lame excuse.

Mr. O'Malley

With the possible net immigration, and the normal substantial increase in the labour force that happens every year anyway, we have to achieve even higher employment growth rates than we have succeeded in doing. Obviously, overall economic policy is very important in that regard. The control of public expenditure is very important and has contributed to economic improvement here in recent years. What is also important, at this juncture when so much change is occurring, is to consider our fundamental industrial policies in a broader sense than just in terms of agencies and so on, which is the way that this country has tended to consider industrial policy. I look forward to receiving what I am sure will be a refreshing and radical report at the end of this year from the review group of distinguished and capable people which I set up.

Mr. Durkan

Does the Minister accept the fact that seems to be evident to everybody, that our industrial and investment policies seem to have failed to meet today's requirements? Does he accept that such a high proportion of unemployment, with 265,000 people being unemployed and more coming on to the labour force, is completely unsustainable? Does he accept that at a time when East European countries are attracting vigorous investment from Japan and elsewhere we seem to be failing in our efforts to attract investment of the nature that will resolve our unemployment problems?

Mr. O'Malley

The Deputy makes the error made by many people in thinking that industrial investment to create industrial employment generates the only kind of employment that can be created. In virtually every country industrial employment is a relatively small proportion of overall employment. In developed countries employment in services generally takes up by far the highest proportion of the work force. The proportion in services here is lower than that in many other comparable countries, and that is where the greatest pick-up will occur. We should bear in mind the fact that our tourism industry has not grown at arything like the rate it should have since about 1970. In particular that has been the cause of the loss or non-creation of a great many of service jobs which would have been created otherwise. Manufacturing employment has a very important part to play but it is not, as is often maintained, the sole source of job creation nor can it ever be.

Mr. Durkan

I could not agree with the Minister.

An Ceann Comhairle

I will call Deputy Garland and a final question from Deputy Rabbitte.

Mr. Garland

Would the Minister agree that there is a vast gulf in this policy between his party and the Fianna Fáil Party, apparent from a recent speech by the former Minister for Finance, Deputy Reynolds, when he said that tax reform would not solve our jobs problem?

An Ceann Comhairle

I am sorry to interrupt the Deputy but he must know that quotations are not in order at Question Time.

Mr. Garland

Then I will rephrase my question. Would the Minister agree that it was quite apparent that the former Minister for Finance, representing the Fianna Fáil Party, clearly stated that jobs would not be created by tax reform? Furthermore, would he agree that a policy of overreliance on international investment at the expense of creating a native industry base will not solve our jobs problem?

Mr. O'Malley

I am happy to be able to reassure the Deputy that the revised Programme for Government of 18 October 1991 is an admirable synthesis of the respective economic views of the Progressive Democrats and the Fianna Fáil parties.

Mr. Rabbitte

We are all relieved to hear that. May I ask the Minister, who has referred on three occasions to the review group he has established to report on industrial performance and industrial policy, when their report will be on his desk? Can he assure us that it will be published and will be the subject of a debate in this House at the earliest possible opportunity?

Mr. O'Malley

I understand I will have it on 1 January 1992. It will have to be studied in the Department, of course, and shown to the Government and to all other relevant Departments. As I said in my earlier reply, I would hope to have it published fairly early in the new year but I cannot give an exact date.

An Ceann Comhairle

I see Deputies Creed, Kenny and Belton offering. I will call them on the basis that they will be very brief.

Mr. Creed

Bearing in mind the current levels of unemployment would the Minister agree that the establishment of a jobs forum, which would give many concerned parties a voice, would be a worthwhile exercise at this point and depoliticise the point-scoring political debate taking place at present at the expense of the unemployed?

Mr. O'Malley

I am not at all convinced. If I thought a forum would be of any value I would have one.

Mr. Creed

The trade union movement——

Mr. O'Malley

There are plenty of fora in which different social partners and interests groups can express their points of view or policies in relation to economic matters, plenty of them. I really do not think we need another.

Mr. Belton

In replying the Minister indicated that 29,000 jobs had been created since 1989. I had tabled a question to the Minister today in relation to job creation in County Longford which was disallowed. Would the Minister say whether, in the creation of the jobs about which he spoke, different regions of the country were specifically highlighted, that is, regions that have suffered through specific loss of jobs? Were they taken into account in the creation of those jobs or were they brought about by way of a national policy on job creation which permits industrialists to decide wherever they want to establish plants?

Mr. O'Malley

The IDA, as has always been their practice, identify particularly black spots throughout the country, whether they be counties or areas within counties, where they feel that special efforts are warranted. They revise that practice from time to time as requirements dictate. Unfortunately, the very fact that a place is a black spot in terms of industrial investment must mean that it is a black spot for a particular reason. Therefore, it is more difficult to overcome the problems there. Appropriate agencies, in particular the IDA on a national basis, make every effort to alleviate the most serious aspects of the problems.

Mr. Kenny

Replying to questions on Tuesday last the Taoiseach, in his capacity as Minister for Finance, refused to speculate on the possibility or otherwise of updating the 1982 Central Bank report on unaccounted incomes and refused to speculate on the extent or otherwise of the black economy. Would the Minister for Industry and Commerce care to comment on the growth or otherwise of the black economy or on the numbers employed therein, saying whether he agrees that the pressures of taxation and the disincentives to establish businesses are some of the principal factors driving people with initiative into the black economy in the first instance?

An Ceann Comhairle

That is a distinct, separate question.

Mr. O'Malley

It does seem to me to be a separate question. While I would be very willing to discuss it with the Deputy, I am sure that if the present Minister for Finance thought it inappropriate to wander into that field I might wisely follow suit.