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Dáil Éireann díospóireacht -
Tuesday, 5 Nov 2002

Vol. 556 No. 3

Priority Questions. - Job Creation.

Arthur Morgan

Ceist:

63 Mr. Morgan asked the Tánaiste and Minister for Enterprise, Trade and Employment the level of the most recent annual block Department grants to industry allocated to IDA Ireland, Enterprise Ireland and the county enterprise development scheme; and the effective cost per new job created in each of these areas. [20443/02]

I assume the Deputy is referring to grants to industry allocated to these agencies as set out under subheads C2, D2 and G1 of my Department's Vote and as published in the Revised Book of Estimates for 2002.

The allocations set out were as follows. Under subhead C2, for IDA Ireland grants to industry, the allocation was €87.398 million. The cost per job created and sustained by IDA Ireland over the seven year period 1995-2001 was €13,375. Under subhead D2, for Enterprise Ireland grants to industry, the allocation was €76.595 million. The cost per job created and sustained by Enterprise Ireland during 2001 was €8,977. Under subhead G1, for county enterprise boards, the allocation was just over €14 million. In 2001, the latest year for which figures are available, the average cost per job created by the county enterprise boards was €4,500.

It should be noted that the actual payment of grants is a function of the demand by companies for financial support, that is, it is demand led rather than supply driven. During the course of the year it became apparent that, owing to the slowdown of the economy, the actual draw down by indigenous and FDI companies would be less than the original provision and that demands elsewhere in the economy might require the transfer of some portion of these funds. The need also to invest substantially in research, technology and innovation led, in the case of Enterprise Ireland, to some of these funds being transferred for this purpose.

Accordingly, in the case of IDA Ireland, the allocated amount for grants to industry currently stands at €74.398 million and in the case of Enterprise Ireland the corresponding amount is €69.395 million. Some of IDA Ireland's and Enterprise Ireland's expenditure would also be met from its own resources by agreement with my Department and the Department of Finance. When 2001 outturn figures for Enterprise Ireland and IDA Ireland are compared with 2002 allocations the actual levels of grants to industry for these agencies remain constant.

Much greater funding is being made available to international inward investors while similar funds have never been offered to Irish businesses. Surely now is the time to create a level playing pitch when encouraging economic development and job creation. More than €13,000 is required to create a job through IDA Ireland compared with just under €9,000 per job through Enterprise Ireland. It should be a prerequisite that agencies ensure matching funding for job creation, particularly if the cost per job is cheaper, as it is in the case of Irish companies.

It is a fact, as the figures show, that the cost of job creation through IDA Ireland is more expensive than through Enterprise Ireland. That is because foreign investment is more expensive to attract. However, a significant number of prestigious jobs have been created in this economy in recent years as a result of international investment. While the cost of jobs is higher, the level of investment is considerably higher as well. It is not correct, therefore, to say there is any discrimination against Irish enterprise or any effort to pay less to Irish enterprise. It costs less for Irish enterprise to create jobs. However, the trend has been downward in the past number of years both in the case of Irish enterprise and foreign investment. That is a welcome trend. The cost per job has reduced, in the case of Enterprise Ireland, from €14,867 in 1988 to €8,977 in the five year period up to 2001.

There is no question of discrimination or of an inadequate amount being made available through Enterprise Ireland.

A total of 80% of jobs in the State are created by indigenous industry employing ten or fewer people, a fact recently stated by the ESRI. If that is the case, the cost difference, as outlined by the Minister, is more than €4,000 per job. The facts speak for themselves.

The cost per job to Enterprise Ireland has never been an issue. The Deputy is wrong to assume the level of finance for job creation by Irish companies is less than it should be.

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