Vol. 484 No. 3
23 Mrs. Owen asked the Tánaiste and Minister for Enterprise, Trade and Employment the proposals, if any, she has to tackle the serious problem of skills shortages which have been identified in the recently published reports from the National Social and Economic Forum. [22099/97]
On taking office in July, one of the Government's first decisions was to allocate an extra £5 million to commence the expansion of intake in computing and technician courses, with a view to achieving an increased annual output of 1,000 computer graduates and 750 technician graduates.
More recently, the Government decided, in a radical initiative, to establish a £250 million scientific and technological education investment fund. In 1998, £100 million is being allocated to the fund, with the balance of £150 million over each of the following two years. In addition, the fund will be open to private donors. This is a direct and tangible Government response to the needs of our rapidly developing economy.
The NESF Report No. 14 on Self-Employment, Enterprise and Social Exclusion makes a number of proposals to further improve education and training in enterprise and self-employment, not all of which relate to my Department's area of responsibility. My Department and FÁS, as appropriate, are examining these proposals with a view to identifying areas in which they could provide further assistance and encouragement to potential entrepreneurs.
I have established, with my colleague the Minister for Education and Science, a new business, education and training partnership to develop national strategies at the highest levels to tackle the issues of skill needs, manpower forecasting and education for industry and business.
I thank Chris Horan, the chief executive of Iona Technologies, one of the most dynamic and successful Irish technology companies, for agreeing to chair that forum.
Does the Minister agree the budget failed dismally to deal with the gap in the market? In every town and village there are advertisements for staff in shop windows. I am not talking merely about the high-tech computing skills that are absent in the workforce, but about drivers, warehouse minders, contract cleaners, caterers, painters and decorators, hairdressers and people to work in launderettes and dry cleaning businesses. Every section of the service industry lacks staff. Is the Minister aware the budget did nothing to correct the mismatch between what is needed in the workforce and what is being provided, even by FÁS which provides good courses? Is she aware that 80 per cent of the small firms questioned in a recent survey carried out by the Small Firms Association said they could not fill vacancies. What is the Minister doing to ensure the training and skills being provided are what is required?
I am conscious of the huge problem that exists in our economy. Growth outturn for 1998 will be 8.4 per cent while almost 10 per cent of the workforce is unemployed. There is a huge inconsistency in those figures. Thankfully, the number is moving downwards, but not as rapidly as I would like. The Government's first economic mission is to ensure that more people participate in work and that more opportunities are provided for the unemployed. Next year we will spend almost three-quarters of a billion pounds on schemes to encourage people to move from welfare to work. That is a huge increase on the previous year. The budget for training for the unemployed has increased by 21 per cent, the local employment service budget has increased by 95 per cent and training for people at work — we must ensure we sustain existing jobs — has also increased by 95 per cent. This shows a major commitment on the Government's part to make it easy for people to move from unemployment into the world of work.
I cannot accept the budget did nothing in this area. We moved the threshold for the payment of PRSI from £80 to £100 which will make it more attractive for people to take up low paid jobs. We introduced a tax initiative for the long-term unemployed. A long-term unemployed person will receive an additional personal allowance of £3,000 and an allowance of £1,000 per child in the first year. That will be scaled down to £2,000 and £1,000 in years two and three, respectively. In addition, companies that take on a long-term unemployed person will receive double the cost allowance which should make it attractive for them to do so.
In the context of implementing the White Paper on human resources and the employment service, my Department intends to introduce initiatives early next year with a view to providing opportunities for more unemployed people to participate in training and work. This must be directed, in particular, at young people. We want to ensure that fewer young people go from school to unemployment. Many of them end up unemployable at an early age because they have been out of school and work for a number of years. In the context of the EU summit on unemployment and other initiatives the Government intends to pursue, there should be dramatic improvement in the opportunities for the unemployed in our economy in the next 12 months.
Does the Minister agree there is something seriously wrong when there are approximately a quarter of a million people on the unemployment register, but business people cannot fill vacancies? Is she aware that in the past few days a major employer, Mr. Campbell, indicated that 20 per cent of the people working in his business are not Irish? What has the Minister done, in conjunction with FÁS and her colleague, the Minister for Social, Community and the Family Affairs, to create more incentives for the unemployed to take up these jobs so that they can be filled from the quarter of a million who are unemployed?
We have done a considerable amount in that respect. The skill shortages have been emerging for a considerable length of time. Notwithstanding the fact that my predecessor spoke a great deal about it, no action was taken. Within two weeks of forming the Government, one of our first decisions was to allocated £5 million for the academic year 1997-8 to ensure that more people take up computing and technician courses.
One does not need those skills in the hairdressing industry.
We had a ludicrous situation whereby the economy was financing inward investment, but those inward investments had to go outside the economy to get employees. Let us give credit where credit is due. The £250 million fund will assist the economy considerably to provide us with skilled people for the emerging jobs. As a result of various discussions between my Department, the Department of Education, FÁS and the Higher Education Authority, we have set yearly targets for the increased numbers of people needed with computing and linguistic skills and technician qualifications. They were the three main areas in which a crisis was emerging.
I accept what the Deputy is saying. It is not satisfactory that almost 10 per cent of the workforce should be unemployed while employers find it difficult to fill vacancies. That is why the Government placed great emphasis on personal income tax in the budget and allocated £517 million in a full year towards the reduction of personal income tax. In particular, the tax incentive for the long-term unemployed will make it easier for people to take up employment. In the first year a long-term unemployed person with three children will receive an extra £6,000 by way of a tax free allowance. In addition, the employer will get double the cost of employing that person.
That is a targeted and sensible approach to encouraging the employment of the long-term unemployed. People registered as unemployed are trained in the areas mentioned by the Deputy, but employers cannot get them to fill vacancies. There are wider issues we must address in that context and we intend to. It is not the case, however, that we do not have people trained in those areas. Sometimes, the incentive is not there for those persons to take up employment. Everybody responds to the economics of their own situation. If we make it sensible by changing tax, the PRSI threshold and by encouraging employers to take on the long-term unemployed, it will make a difference.
As the time allocated for priority questions has expired, Questions Nos. 24 and 25 will now be taken in ordinary question time.
