John Bruton
Ceist:3 Mr. J. Bruton asked the Taoiseach if he will outline any new initiatives he intends to take to control the growing unemployment crisis; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Unemployment Rate.
Dick Spring
Ceist:4 Mr. Spring asked the Taoiseach if, in view of his expressed determination to make unemployment his first priority, he will outline Government policy on the matter.
Michael Noonan
Ceist:5 Mr. Noonan (Limerick East) asked the Taoiseach if he will outline the main policy changes he intends making to create extra jobs.
John Bruton
Ceist:6 Mr. J. Bruton asked the Taoiseach if he intends to amalgamate the Government task force on employment and the separate task force established to implement the Culliton report; and, if not, if he will outline the relationship, envisaged between the two task forces.
John Bruton
Ceist:7 Mr. J. Bruton asked the Taoiseach if he proposes to establish an all-party forum on jobs, involving the social partners; and if he accepts the proposed terms of reference for such a forum forwarded to him by Fine Gael.
I propose to take Questions Nos. 3, 4, 5, 6 and 7 together.
As I have stated publicly, the provision of jobs is top of the agenda for this Government.
My colleagues and I are currently reviewing the various initiatives which have been taken to deal with the appallingly high level of unemployment. I may summarise these as follows: the new employment and training schemes aided by the European Social Fund which have the potential to take 25,000 persons off the live register over the next 12 months; the task force on employment under the Central Review Committee of the Programme for Economic and Social Progress composed of representatives of the social partners, Government Departments and commercial State bodies; the area-based strategy being conducted in 12 pilot areas of high long term unemployment under the Central Review Committee of the Programme for Economic and Social Progress; the committee of Ministers, chaired by myself, concerned to implement the recommendations of the Culliton report on industry and services; the task force, mainly composed of departmental Secretaries, who will report to the committee of Ministers on the measures to implement the Culliton report and the recently established task force on the tourist industry composed of industry specialists and representatives of the four commercial banks.
Apart from the foregoing specific initiatives, the general thrust of Government fiscal policy, as reflected in the revised Programme for Government, is to create the personal taxation climate which is most conducive to the creation of jobs. It is also fundamental to Government jobs policy to continue, in consultation with the social partners, the consensus approach to economic and social policies which in recent years has made our economy a low-inflation cost-competitive one. We have already seen that that general economic climate has resulted in increased employment in recent years which amounted to 41,000 in the four years from April 1987 and to 75,000 in the private non-agricultural sector in the same period.
The Government are, however, far from satisfied with the rate of success in converting economic growth into increased employment. For that reason, we will be considering what specific new initiatives we can take. I, together with the relevant Ministers, will be meeting the Central Review Committee of the Programme for Economic and Social Progress as soon as such a meeting can be arranged. I am also considering the various suggestions that have been made by Opposition parties, the Irish Congress of Trade Unions and others, for some kind of forum in which new measures necessary to create employment could be studied and discussed.
A major influence on job creation throughout the decade will be exerted by the increased Structural Funds and the new Cohesion Fund pursuant to the Maastricht Treaty. At the European Council in Lisbon in June, I will be fully supporting President Delors' proposals that the structural and cohesion funding for the four Objective 1 countries be doubled. This increased funding will operate from 1 January 1994 until the end of 1997 and the Government will now begin to develop their proposals to obtain the greatest possible share of that increased funding. Our proposals must give the highest priority to assigning job creation since we now, unfortunately, have the highest unemployment rate in the Community.
I am anxious that whatever new initiatives we take will be practical and successful and take account of the existing special initiatives which I have outlined.
I am not yet, therefore, in a position to say what new initiatives the Government will take or whether there should be any re-organisation among the existing bodies I have mentioned. The matter is, however, being very actively considered because of the top priority we give to the creation of jobs.
Is the Taoiseach aware we face the prospect, between now and the end of the century, that the number entering the workforce will exceed the number reaching retirement age by about 25,000 per year? If that trend continues we could, without much changing, find ourselves with 500,000 people unemployed here within the next eight years. Would the Taoiseach consider from any point of view — politically, socially or economically — that that would be totally unsustainable and that in the true meaning of the word we will face an emergency so far as jobs are concerned over the next eight to ten years?
I accept that if we were to stand still and not be very successful in the creation of jobs we could reach a figure not too far away from that mentioned by the Deputy but that would be to assume a defeatist attitude in relation to job creation and a worse scenario in relation to world trade on which we depend so much here in Ireland, we have to export £2 out of every £3 we produce. The external environment is important in that regard. I am also well aware that to provide jobs for the number of young people coming into the labour force and given the age structure of our population, would require an increase in job creation of between 3.5 and 4 per cent. That level of increase is a major challenge for any Government, and I am not aware of any developed country which creates jobs at that rate in any particular year.
Have the Government any projections of their own, based on existing policies being pursued by the Government, as to what the level of unemployment will be, say, three or four years for now?
I do not have that detail on my file as of now but I can assure the Deputy that I am giving top priority to the weaknesses in our economic structure in relation to job creation. We are all very familiar with the mismatch in our economy. In 1990, for example, there was a growth rate of about 7.25 per cent and thousands of jobs were created but not anything like the number we could expect from that level of growth. I have already been in touch with the European Community and the OECD to organise a major study to find out the reasons and the causes for this mismatch within the economy. Our linkages are not as good as they should be but we know that these can be improved. Nevertheless, that does not answer the full question. There are many questions to be answered to determine what the policy initiatives should be in the future in addition to what I have already mentioned here today.
Would the Taoiseach not agree that for him to say that a projection as to the level of unemployment just three years from now is just "a detail" which he does not have on his file is to suggest that he has no appreciation of the seriousness of this social crisis and brings into question whether he should be in the job he is in at all?
As somebody who has created his own employment I think I am better versed to talk about the creation of employment than anybody on the benches opposite, including Deputy Bruton himself.
(Limerick East): I put it to the Taoiseach that the fiscal policies which were pursued by him on behalf of the Government when Minister for Finance and which added £2.5 billion to the national debt, reversed the declining trend in the EBR and put upward pressure on interest rates are one of the fundamental causes of the unemployment crisis we now face. Would he not agree that a reversal of these policies is a prerequisite for creating employment?
I think Deputy Noonan is reading the wrong economic data when he says that I increased borrowing, the EBR and all the strange things that he talks about.
(Limerick East): The Taoiseach increased the national debt by £2.5 billion.
I think he is talking about the hallucinations that he has in bed at night in relation to this matter. I would remind the Deputy and the House, and anybody else concerned, that 1989 was my first year as Minister for Finance a year in which public expenditure was lower than in 1987. Consequently, I reduced the level of expenditure, as a percentage of GNP. At the same time I reduced the Exchequer borrowing requirement. There was a world recession in 1990.
Percentage wise.
Despite all the proclamations of doom and gloom, that the Exchequer figures were off the rails — it was suggested that they were out by £150 million — to the disappointment of Deputy Noonan and his colleagues we ended up the year with a result that they never expected.
A brief question from Deputy Noonan.
(Limerick East): Again, would the Taoiseach not agree that while he was Minister for Finance he added £2.5 billion to the national debt, that in 1991 the EBR, which had been declining since 1987, began to rise again as a result of his budget, that there is upward pressure on interest rates and that these factors are contributing to the highest level of unemployment since the foundation of this State which at present, on the most modest estimate, is 288,000 persons? Would the Taoiseach not take this into account and agree that a change in this fiscal policy, which has been reinforced in the 1992 budget, is a prerequisite for making any dent in this record level of unemployment?
I think the Deputy is in no position to make any suggestions, good, bad or indifferent. During the term of office of the 1982-86 Government employment fell by 70,000——
I thought the Taoiseach said that he wanted to move forward.
——that is their own record. They doubled the national debt.
Deputy Farrelly should permit the Taoiseach to make his statement.
In recent times——
Following a time when you quadrupled it. I have been hearing this rubbish about doubling the national debt for far too long. You quadrupled it between 1976 and 1982.
As a percentage of GNP, we reduced the level of borrowing from a figure of 13 per cent, which we inherited from the party opposite, to just over 2 per cent in 1991. That is the reality.
(Limerick East): Tell that to the unemployed.
In relation to interest rates, Deputy Noonan knows as well as I do that interest rates in Ireland are determined by what the Bundesbank do in relation to the Deutschemark.
Very interesting.
I would also remind him that between 1987 and 1991 we reduced the differential between German and Irish interest rates which stood at 9 per cent in 1987 to less than 1 per cent in 1991. Contrary to what he is claiming this situation has been brought under control. As soon as the position in Germany changes, probably in the middle of this year, it is likely that we will see a reduction in German interest rates and, consequently, a reduction in Irish interest rates.
With regard to the examination of the proposals for a forum that he intends to carry out will the Taoiseach specifically examine the request made by the Irish National Organisation of the Unemployed for a forum on employment which would be based on the New Ireland Forum to bring the various elements of society together to study this problem not so much as a means of addressing the technical issues but as a means of mobilising support for a drive to tackle this emergency?
All suggestions in relation to unemployment and, as I said, the question of setting up some kind of forum are being considered, including those made by the political parties and others.
Will the Taoiseach invite the Irish National Organisation of the Unemployed to meet with him to discuss this proposal?
I could not commit myself to meeting every organisation who want to see me but possibily some Minister will see them on my behalf.
In the interests of creating more jobs, will the Taoiseach say why he has not issued fresh directives to the Industrial Development Authority to channel money into indigenous industry which is labour-intensive?
The Deputy should be aware that no Government nor the Minister for Industry and Commerce is in a position to issue directives to the Industrial Development Authority under the legislation under which they were set up.
What about Mr. Goodman?
I am fully aware, just as I am sure the Deputy is, of the Culliton report and the taskforce which has been set up to implement it and which borders on the suggestion the Deputy has made.
A final question from Deputy Bruton.
Is the Taoiseach aware that he has just made an inaccurate statement to the House? He said that the Government do not have power under the industrial development Act to give directions to the Industrial Development Authority. They do have the power——
In relation to what? Quote me the section.
If the Taoiseach so wishes, I will show him the particular reference.
Let us have relevant questions, please.
May I ask the Taoiseach, first, after the very lengthy reply he has given, if there is any proposal anywhere that will create a single job? Second, the Taoiseach referred to the success of his own businesses for which I am sure all of us in this House rejoice, but would he not agree that, in the running of his own business, if he went to a meeting to discuss it he would have available to him projections for two to three years ahead? Yet he came in here to discuss unemployment and, by his own admission, did not have any projections in respect of employment. Will the Taoiseach agree that if he proposes to run the country as he would wish to run a business, he should at least equip himself with the necessary information, such as projections about the levels of unemployment, which is the most basic information one would have for a realistic discussion?
The Deputy should not lecture us on what we should be doing; that is why he is on the Opposition benches and will remain there.
Rubbish.
The Taoiseach is not doing too well after one week in office.
In relation to the IDA, I want to make it clear to the House that no Minister — or Government — issues directives to them in relation to any projects. They set the policy for the IDA who carry out that policy at arm's length from the Government. The Deputy knows as well as I do, as a former Minister for Industry and Commerce, that you do not issue directives about an industry. The Deputy also asked a petty question about projections: I have no hesitation in providing him with projections if he needs them but one does not expect to go into that kind of detail in an argumentative fashion on the floor of the House. However, I will have them despatched to him.
(Interruptions.)
Question No. 8, please.