Vol. 484 No. 3
25 Mr. Perry asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will simplify schemes by reducing their number and focusing on successful schemes in view of the confusion among the unemployed in relation to the practical details of the many schemes and payments in existence and the many agencies that provide them. [22334/97]
The Government is committed to seeking to establish an inclusive society where all citizens have the opportunity and the incentive to participate fully in the social and economic life of the country.
Last week's budget gave ample evidence of this commitment. In particular, it provided for 5,000 extra places on the back-to-work allowance scheme, 2,000 extra on community employment schemes, a special tax allowance to encourage unemployed persons into the active labour market, a special tax break to encourage employers to hire unemployed persons and a major change to the family income supplement whereby the average payment for recipients will increase by £11 per week as it will be calculated on net income.
I am concerned that the large number of initiatives to help in the fight against unemployment are as effective as possible. They are under continuous review to ensure they are focused on and targeted at the real needs of unemployed people. I want to see an improvement in the service the State delivers to unemployed people and in this regard I am considering the best means of achieving this in the context of implementing the White Paper on human resources and other such matters.
The budget was effective in some areas of employment but from an employer's point of view, extreme difficulty is experienced due to a lack of information.
We are still on priority questions which should have finished after 20 minutes. The Deputy should ask a question rather than make a statement.
Is the Minister aware that if an employer takes on people from a FÁS scheme and one leaves, he or she will have to take on two people to get a grant and that people on community employment schemes will not take a job afterwards as it will not pay them to do so? There was an incentive to make it worthwhile for people to leave community employment schemes but in service industries there is a lack of information on it. Will the Minister simplify information for employers as there is a huge number of schemes and it is difficult to get people working on the shop floor?
I accept there is a large number of schemes, some of which are aimed at encouraging the unemployed to re-enter the workforce and others targeted at industry. Industry can avail of in excess of 45 different schemes to expand employment. I am anxious to ensure schemes have a very focused approach for industry and particularly to help unemployed people. As I stated earlier in response to Deputy Owen, £750 million will be spent in 1998 on various schemes to help people from welfare to work. It must be ensured in the first instance that the taxpayer gets value for money but, more importantly, that unemployed people get the greatest possible benefit from that huge State resource in the context of implementing the White Paper on human resources and reviewing community employment.
The changes made in the budget, such as calculating family income supplement on net income, changes in tax benefits for the employment of the long-term unemployed, the double allowance for employers and the fact that a long-term unemployed person will get an increased personal allowance of £3,000 in the first year, an additional £1,000 for every child and keep his or her secondary benefits should have an impact in encouraging long-term unemployed people back to work and employers to take them on. However, we do not live in an ideal world and the fact that almost 10 per cent of the workforce is unemployed, notwithstanding the Celtic tiger and 8.4 per cent growth this year, must concern any Minister for Enterprise, Trade and Employment. All schemes which help industry and unemployed people need to be examined to ensure we have the most focused and targeted response possible.
Is the Minister aware that on a FÁS scheme only 10 per cent of people are allowed to be re-employed on a continuation of the scheme? As a result people are not suitable for other employment and return to receiving unemployment assistance because training on the scheme is inadequate to provide them with jobs elsewhere? A major anomaly in the system is that the figure of 10 per cent is not increased to 50 per cent in rural areas, which would increase employment.
The purpose of community employment is to help reintegration to the labour market, not to provide people with long-term or permanent jobs and 75 per cent of all participants are taken on with that in mind. To the best of my knowledge, approximately 70 per cent of those who participate in community employment continue into full-time employment afterwards. It is a high percentage but I wish it was higher and we must examine how the participation rate can be further increased.
Community employment has social economy dimensions which CORI, in particular, is very keen to expand. We must separate its social economy function from its reintegration to the labour market to ensure we know what we are doing and that FÁS knows what it is expected to do. There is capacity to change some of the rules, such as the Deputy suggests, but I am not certain about the problem he highlights in rural areas. However, there are difficulties for people in rural areas in participating in community employment and in some cases even getting people together to get a scheme under way. Greater flexibility is needed to ensure the scheme is targeted at those it is meant to help. I will look at the Deputy's suggestion in the context of the review that is under way.
As leader of the Progressive Democrats Party the Minister took Fianna Fáil prisoner in the budget, but given that she delivered on Progressive Democrats Party ideology in it, she did nothing——
In fairness to Members who submitted questions through the lottery we wish to move on to them. We are still dealing with questions that were submitted for priority. Deputies should be brief.
Why did the Minister take such little action in regard to low pay and the problem of motivating long-term unemployed people? Will she outline the position on a minimum wage and what she intends to do about it?
Will the Tánaiste tell the House how the double allowance will work for employers who take on the long-term unemployed?
The sum of £517 million that will be given to PAYE taxpayers is long overdue and the Government as a whole supported the package of measures. It is wrong to suggest somebody was taken prisoner and the Government is committed in its programme to reduce the burden of tax on all workers. Four hundred thousand workers, mainly in the PAYE sector, pay the top rate of tax and taxes on work in our economy are too high. In Northern Ireland and Britain, for example, there is an initial rate of 10 per cent, a standard rate of 23 per cent and a higher rate of 40 per cent. Will Deputy Broughan increase tax rates if he gets into power after the next election?
I would increase tax allowances.
Between 1989 and 1992 I heard the same cries from some of the same sources but when those parties were in power they did not restore the old rates.
Increasing the PRSI threshold from £80 to £100 and calculating family income supplement on net income will greatly benefit recipients of low pay. The average increase will be £11 per week which is enormous. One would have to receive a huge increase in nominal pay to get such an increase in take-home pay.
The tax allowance referred to by Deputy Rabbitte for a long-term unemployed person is £3,000 in the first year, £2,000 in the second and £1,000 in the third and £1,000 per year for each child. If it costs £150 per week for an employer, he or she will be able to claim double, £300 per week, against his or her tax liability. I am not the Minister for Finance but that is my understanding of its operation. Employers will receive double the cost of employing a long-term unemployed person and that person will keep all of his or her benefits during the three years.
