Written Answers. - Tackling Unemployment.
Bertie Ahern
Ceist:
23
Mr. B. Ahern
asked the
Minister for Enterprise and Employment,
in view of a newspaper report (details supplied) in the Cork Examiner on Monday, 13 February 1995, in which he stated that his first priority is to make an impact on the employment situation, the way in which it is proposed to do this.
[3654/95]
There is widespread agreement in our society that tackling unemployment remains the most important challenge facing us. With some 280,000 people unemployed — an unemployment rate of over 14 per cent — the problem speaks for itself. The magnitude of the unemployment problem is such that, clearly, there are no quick fixes. However, rather than acting as a deterrent, this must strengthen our resolve to tackle the problem across a broad range of fronts with imagination, persistence and determination.
One overriding priority must be to create and maintain the framework conditions which fuel growth in the economy. It is also essential that we promote measures which turn economic growth into increased employment, either by preserving existing jobs or creating new ones. That is why the Government introduced a number of measures in the budget designed to lower the costs associated with job creation.
Among the measures we introduced were: the annual income threshold below which the lower rate of employers' PRSI of 9 per cent applies has been increased from £9,000 to £12,000; the employers' PRSI exemption scheme is being extended to include all first-time workers under the age of 23 who meet the conditions; and the standard rate of corporation tax has been reduced from 40 per cent to 38 per cent and we plan to push it down further in line with European norms, as resources allow.
One of the key effects of these measures will be to lower the costs of employing people by some 3 per cent, as well as improving the profitability of Irish businesses and providing increased access to the capital necessary for growth and expansion. These changes will also have a substantial beneficial effect on the services sector, which is a major vehicle for employment growth in all modern economies.
As I mentioned earlier, we must tackle the unemployment situation on a range of fronts. Creating the right economic conditions is the essential first step. With these in place, it is the goal of my Department and the development agencies to build on them by helping firms to increase their competitiveness and thus create and maintain jobs.
TheOperational Programme for Industry 1994-99, which I have launched recently, sets out an overall target of 20,000 gross new jobs per annum. This target was, exceeded by Forbairt, IDA Ireland and Shannon Development in 1994. I am confident that the agencies will maintain this excellent performance in 1995 and, over the remainder of the decade.
Overseas industry has made a very significant contribution on job creation. IDA Ireland has been outstandingly successful in winning new greenfield and expansion business in the face of ever increasing competition. I am fully committed to supporting the agency in its drive to win additional business and provide a value for money return, in terms of jobs created and other benefits, to the economy.
Indigenous industry is the subject of ongoing transformation, with traditional industries being replaced by modern technologically-sophisticated firms equipped to compete in today's global markets. In fact, 70 per cent of all indigenous companies now operating have been established since 1973. Building on this radical transformation, Forbairt has set some ambitious targets for indigenous industry to the year 2000 which envisage that: sales of indigenous businesses will rise to £15 billion from a 1994 level of £10.8 billion; exports of indigenous businesses will increase from £5.7 billion to £9 billion, and net employment in indigenous industry will increase from 118,000 to 130,000.
Achievement of these targets will pave the way toward creating an indigenous industrial sector which is more innovative and which has the core competencies necessary to achieve sustainable competitive advantage. Only by adopting a long term strategic approach will we make a lasting impact on unemployment.
An indigenous sector possessing both the "know what" and the "know how" must also have access to the capital necessary to fund growth. The agencies play an important role here, particularly through the provision of equity finance. However, the agencies need not be the prime movers in the provision of capital. In my budget speech I outlined an approach which involves increased responsiveness by the banks to the needs of entrepreneurs and business generally and welcomed the recent positive steps the banks have taken to achieve this. I also referred to our objective of building on the very successful £100 million loan scheme for business expansion, and to the new equity measure which has been introduced in the Operational Programme for Industry. Taken together, these initiatives will provide a sound financial foundation for the accelerated growth of indigenous enterprise.
While all of these measures will impact positively on the creation of employment opportunities, we must also work proactively to tackle the specific problem of long term unemployment. Last week I announced the creation of a new unit within my Department whose mandate is to help the long term unemployed get back into employment. The new unit will oversee the putting in place of the local employment service as recommended by the Task Force on Long-term Unemployment. In addition, the unit will come forward with policy proposals for new initiatives to reduce the number of long term unemployed and to better co-ordinate the delivery of State services to the unemployed.
I am also concerned that a large proportion of the unemployed are young people, many of them school leavers. This is a serious problem, one which cannot be tackled in isolation by any single Department of State, particularly when the evidence shows that youth unemployment is closely linked to low educational achievement. The fact that large numbers of young people drop out of the educational system at an early stage without qualifications exacerbates the problem.
For my part, I am committed to increasing employment opportunities for school leavers and young people through greater focus on training and upgrading of skills generally. My forthcoming White Paper on training will consider how best to ensure maximum benefit from our training investment and will address such issues as the skills gap, and "in-company" training. It will also review and seek to improve the operation of the national Youthstart programme which covers employment and training opportunities for unqualified school leavers in the 18-20 age group.
I am determined that the employment needs of our economy will receive concerted and sustained attention in every aspect of my Department's work. To that end I have initiatied a review of all aspects of our employment policy to ensure that we have a coherent strategy in place. I have sought and will welcome input and suggestions from all with an interest in improving the quality of policy intervention.
