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Dáil Éireann díospóireacht -
Thursday, 28 Apr 1994

Vol. 442 No. 2

Written Answers. - Wage Subsidies.

Michael Noonan

Ceist:

64 Mr. Noonan (Limerick East) asked the Minister for Enterprise and Employment his policy on the use of wage subsidies to encourage employers to recruit persons who are on the live register.

Ivan Yates

Ceist:

83 Mr. Yates asked the Minister for Enterprise and Employment his policy on the use of wage subsidies to encourage employers to recruit persons who are on the live register.

I propose to take Questions Nos. 64 and 83 together.

Wage subsidies can be a legitimate element in the menu of active labour market measures engaged in by Government with a view to influencing the market — determined level or distribution of employment. Research suggests, however, that it is an instrument which must be used with caution because of the potential deadweight costs that can arise from the fact that the employment may have occurred in any event, and also because of the potential it can have to lead to employment substitution and displacement. Consequently, it is best used as a closely focused and targeted instrument aimed at overcoming particular difficulties or indeed prejudices that some groups such as the long term unemployment may face in accessing the labour market. FÁS currently operates the employment incentive scheme (EIS) which aims to encourage employers recruit additional employees from among long term unemployed persons, early school leavers and other disadvantaged persons. This scheme is operating at capacity level relative to the budgetary provisions for it this year.

As I told the House last month, in response to another parliamentary question, the continued value of the EIS and indeed to somewhat comparable enterprise scheme is being assessed in the light of developments and initiatives in the sphere of enterprise promotion and support currently being put into place including the county enterprise boards, the extended area partnership arrangements, Leader II and the social welfare back to work allowance scheme which, to an extent, overlaps with the EIS and the enterprise scheme. In that context my concern will be to ensure that measures remain in place to assist and encourage unemployed people to secure employment or to start their own business.
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