Today the committee will consider the Estimate for the Department of Enterprise and Employment. I welcome the Minister, Deputy Quinn, the Minister of State, Deputy Brennan and their officials. I propose that the Minister will have 15 minutes for his opening statement. Fine Gael, the Progressive Democrats and the Technical Group will also have 15 minutes for opening statements. I appreciate that there are counter attractions today and the other parties may or may not take up the time. Is that agreed? Agreed.
Minister for Enterprise and Employment (Mr. Quinn): I apreciate what day it is and I will strictly adhere to the timetable outlined and then leave the matter open for discussion. I am pleased to have this opportunity to elaborate on aspects of the Vote of my Department which may require more detailed explanation, particularly those on the objectives and procedures involved in achieving this Government’s economic policies.
As the committee is aware, Departments have entered into agreements with the Minister for Finance which place the onus on them to achieve a reduction in expenditure year on year. In my Department the second such agreement has been negotiated and there is a commitment to reduce overall expenditure over a three year period. Delegated authority ensures that officials are committed to exercising controls over expenditures and answerable for any failure to achieve target savings.
In a further step in the process of revamping operations under the Vote, I have arranged that the Director of Consumer Affairs and the Companies Registration Office will in future be funded by grants which will cover both pay and non-pay expenditure. The amount of such grants will be determined each year on the basis of the policy objectives and available funding. Each office will be in a position to determine its priorities on that basis and be free to pursue predetermined activities.
The most positive overall job creation performance in 1993 came from those sectors of industry dominated by overseas companies, namely, electronics, international services and healthcare pharmaceuticals, where nearly 6,000 first time jobs were created, leading to a net growth of nearly 2 per cent in total employment in those sectors. In total the IDA secured over 30 greenfield manufacturing projects and 17 new international services projects during 1993. The healthcare and electronics sectors continue to be strongest for major new investments while international services also produced excellent results.
The outlook for manufacturing industry in 1994 is more favourable than this time last year with improving economic conditions emerging in many key markets, particularly the UK and the EU. The pipeline of new investment projects is strong and IDA Ireland would expect manufacturing output growth of about 8 per cent and export growth of 8 per cent in 1994 — both in volume terms. Real GNP growth of 3.25 per cent is forecast for 1994, again remaining well above the EU average. IDA Ireland has a target to produce 6,000 first time jobs by the end of the year which includes a greenfield project target of 94 and an expansion project target of 56.
Since January this year 20 greenfield projects from the US with job potential of 3,500 have been approved by IDA Ireland. A further 20 greenfield US projects are in the pipeline. On the basis of current negotiations these should be approved by the end of the year. The total jobs potential for these 40 projects is about 6,000 to 6,500 jobs over the next three to five years. In addition, a number of significant expansion projects from US companies are already set up in Ireland which should lead to a further 3,000 jobs over the coming three to five years. The high level of activity from the US points to one of the best years ever for IDA Ireland in US investment. This is due to the current environment in the US for internationally mobile investment and the competitive position in Ireland in industrial costs and the economy generally.
As the committee is aware, Forbairt was established to bring together in a more integrated way the developmental and support services hitherto provided on a separate basis by Eolas and the indigenous section of the former IDA. The new agency is intended to provide a new impetus for and a more cohesive approach to the development of locally based industry.
Forbairt personnel have devoted much time and effort in recent months to the task of integrating two quite different agencies into one dynamic cohesive organisation with a clear vision of its future way forward. The committee will appreciate that this job has been tough. Complex staffing matters, for example, have had to be tackled and resolved. I am pleased to report that considerable progress has now been made in this regard and work is ongoing on further integration and rationalisation.
Forbairt's overall objective for the future is to assist in the creation of stronger, more innovative internationally competitive businesses in Ireland, leading ultimately to more jobs and wealth in the economy. Such assistance need not be solely financial. Forbairt also proposes to support enterprise by the investment of advice, guidance and encouragement. I understand that, based on performance to date, the agency should achieve its job creation target for the year. Further details of Forbairt's activities will be announced by the agency at a press conference tomorrow.
Shannon Development, as a critical part of its overall regional development mandate in the Shannon region, continued to promote the growth of the Shannon free zone, the National Technological Park, Plassey and indigenous industry throughout the Shannon region in 1993, helping firms to create 1,449 new jobs in the process. A new initiative by Shannon Development during 1993 was the establishment of the Women's Business Development Centre under the EU NOW programme to promote and assist in the development of new and existing businesses by women. The centre provides advice, consultancy, information, training and financial assistance to women in starting up their own enterprises.
The objective of the county enterprise initiative is to develop an entrepreneurial culture at local level with the intention of generating the maximum number of viable businesses and sustainable jobs. The total number of projects approved by the county enterprise boards to date is 1,300 with a grant commitment value of £11.1 million. These projects are expected to create 1,800 full-time and 600 part-time jobs over the next 12 months. I recently advised the boards of the importance I attach to the completion of their county enterprise action plans and have requested them to focus their efforts in this direction to ensure that the overall strategy upon which they can build for the future is agreed as soon as possible.
The Government is conscious of the need to continue to provide opportunities for the unemployed, particularly the long term unemployed, notwithstanding the encouraging downward trend in the numbers of unemployed so far this year, the fall in the number of proposed redundancies notified to my Department in the last five months which I will detail later and the recent predictions of the Economic and Social Research Institute for a significant increase in the numbers in employment between now and the year 2000.
As the committee is aware, I recently launched a new programme known as community employment, with a view to providing direct Government assistance for the unemployed and, particularly, for the long term unemployed. This programme, which has replaced the social employment scheme, the community employment development programme and Teamwork, builds on the strengths of these programmes and is also a response to the proposals for an expansion of work opportunities in the community through direct intervention.
It provides part-time work opportunities in a normal work environment as well as structured development and training opportunities for participants. In addition, the programme offers each participant a subsidy to help them undertake a training or education course in their own time. Participants retain those secondary social welfare and other benefits such as fuel allowance, butter vouchers and so on, to which they were entitled prior to participating. Special provision is made for assisting the older long term unemployed. As a target 25 per cent of places will be reserved for persons aged 45 years or more who have been unemployed for over three years.
Exchequer funding of £171.26 million will be available for community employment this year, a significant increase on last year's provision of £106.5 million for the three programmes which community employment replaces. It is planned that this level of funding will provide about 40,000 places on the programme by the end of the year. I am pleased that the basic allowances payable to participants on community employment will be increased by 3 per cent to take effect in respect of payments for the week ending Wednesday, 27 July 1994. A person without dependants will get £79.30 per week while the adult dependant allowance will be £34.70 per week and the child allowance will be £13.20 per child per week, which is the full rate. This means, for example, that a participant with one adult and three child dependants will be paid £153.60 per week.
An examination is currently underway into the feasibility of introducing a comprehensive employment and training programme, to be known as Youthstart, for school leavers. The objective of the programme is to integrate the provision of all initial training for new entrants to the labour market. A key feature of the new programme will be the traineeship model, which provides for a combination of on and off-the-job training. This traineeship model is well established in other European countries. Certification of the training received will also be an important feature of the new programme, which will help progression to further education and training. The cooperation of employers will be crucial to the success of any such scheme.
In line with the recommendations of the Culliton and Moriarity reports, a new FÁS industry division has been set up to concentrate on training for those at work. The industrial training committees established by FAS have produced a number of reports on the training needs of particular sectors of industry which are instrumental in identifying what needs to be done to increase the level of training in those sectors and also what specific training is required.
My Department, in conjunction with Forbairt, FÁS and representatives of industry, is currently examining further ways of developing training in industry. It is now accepted in all industrialised countries that science, technology and — most of all — innovation, are essential components in industrial development. We have just come through the first phase of Structural Fund support for science and technology and are now entering the second phase.
There have been many significant adaptations to the programme of science and technology activities, the most significant of which is the move from an initial position of supporting infrastructural development to direct support for research and development in industry. In 1993, expenditure in respect of the science and technology development programme amounted to £43.868 million, £20.452 million of which was made available through my Department. The remainder was non-voted expenditure in respect of the industry research and development scheme, known as Measure 6, which started in 1993. The scheme is separately funded by the European Regional Development Fund and effectively involves no net expenditure by the Exchequer. Consequently, it does not appear in the Estimate.
For 1994, a total amount of £34.665 million is being made available for the science and technology development programme. Some £18.665 million of this is included in the Estimate with the remaining £16 million being non-voted expenditure in respect of the industry research and developement scheme.
In February last, I announced the establishment of the Science, Technology and Innovation Advisory Council to undertake the most fundamental and far reaching review of Irish science, technology, innovation policy and structures ever attempted. As the task of the council covers such a broad area, I have made a provision of £150,000 in the subhead to cover consultancy costs which may arise in support of the council's deliberations.
One of the most significant developments affecting Irish industrial relations in the past decade or so has been extensive trade union rationalisation. Since 1980, the number of unions has declined from 86 to 58 — a drop of almost a third. My Department has sought to encourage and facilitate the rationalisation process by paying grants to help defray the costs unions incur in the merger process. Nearly £1.4 million has been paid to date. With a number of mergers under active discussion the indications are that this rationalisation trend will continue, in the medium term at least. A further reduction in the number of unions, which is desirable and achievable, would have positive benefits, not only for our industrial relations but for the members of smaller unions.
Increased responsibilities were placed on the Health and Safety Authority by the further expansion of the legislative base for occupational safety and health in the Safety, Health and Welfare at Work (General Application) Regulations, 1993, which came into effect last year. Also, additional demands on the Authority's resources arise because of the review of safety in the chemical industry being undertaken by the Authority.
It is, as a result, necessary to increase the staff of the Authority by 14 persons during 1994. The recruitment of these additional staff will enable the Authority to increase the level of workplace inspections undertaken annually and to develop further its role in raising Irish industry's awareness of the need for good occupational safety and health standards.
The administration of the redundancy payments scheme is another responsibility of my Department. Earlier this year, I introduced regulations which raised the ceiling used in calculating the statutory redundancy lump sum entitlement from £13,000 per annum, or £250 per week, to £15,600 per annum, or £300 per week. As a result of the new ceiling, workers earning more than £13,000 per annum who are notified of redundancy on or after 1 May 1994 will benefit from increased statutory redundancy lump sum payments to termination of their employment.
It is not possible at this early stage of the year to predict with any accuracy the likely figure for notified redundancies for 1994. However, the trend so far has been promising in that 7,321 redundancies have been notified to my Department in the first five months of the year. This represents a decrease of 1,055 redundancies, or 12.6 per cent, on the 8,376 notified redundancies for the corresponding period for 1993.
I am conscious of the time constraints. I have brought with me the first annual report which the Department of Enterprise and Employment will formally launch tomorrow. I thought it appropriate to make advance copies made available to Members, which they can take after the meeting. There is one for everybody in the audience.