Dáil Éireann, Private Members’ Business, Speech by Tánaiste on Motion re Job Creation

Creating New Employment

Ireland as a small, open economy, is especially reliant on foreign trade and we are focussed on ensuring that we can take advantage of the upturn in international growth and trade.

Encouraging and positive trends are now visible. In recent months, international organisations such as the IMF and OECD have upgraded their economic forecasts.

In its most recent update in January, the IMF forecast that global economic growth would expand by 4% in 2010 and in 2011. This represented a substantial upward revision from their previous forecast which was published in October.

Established trading partners such as the UK, the Euro area and the United States are all expected to experience growth in the medium term, representing renewed opportunities for our exporters. Similarly, Irish exporters are making inroads into less familiar emerging markets whose growth remains buoyant.

Over the past eighteen months, Irish exports have performed extremely well in comparison with international counterparts. My goal is to maintain and enhance the policy environment that has facilitated this resilient performance and that will drive future export growth. We estimate that every job in Ireland associated with exporting sustains another job in the domestic economy.

Job creation

Supporting Enterprises and Safeguarding Jobs

Ensuring that our enterprises receive the support to assist them through the current difficult period is key to safeguarding employment.

That is why I have introduced a broad range of enterprise support measures.

Last year the Government introduced the €100 million Enterprise Stabilisation Fund. This Fund aims to support viable but vulnerable companies experiencing difficulties because of the current economic climate. Companies receive funding, which will go to support a range of activities including market development, productivity improvements and product development. In 2009, €58m was spent on 181 projects, supporting approximately 7,500 jobs. The Fund continues to be rolled out this year.

I am also keen to support SMEs and I am particularly aware that there is difficulty for some businesses in accessing credit. To address this issue, the Minister for Finance announced a new Credit Review System in his Budget 2010 speech. The Credit Review System will examine the credit policies and practices of the banks, particularly for SMEs. This new system will inform Government as to what further action might be necessary to secure the flow of credit to Irish enterprise and, through publication of the analysis from the review process, help ensure that the performance of the banks participating in NAMA is obvious to all.

An additional measure to support enterprises in retaining their employees was the Employment Subsidy Scheme which was introduced last year. Between 2009 and this year we are investing a total of €135 million in this scheme. Under this Scheme, enterprises receive a subsidy of up to €9,100 for each subsidised job.

There have been two calls under the Employment Subsidy Scheme. Applications for the Second Call are still being assessed and it is expected that between the two calls approximately 80,000 jobs will be either directly or indirectly supported.

The Enterprise Stabilisation Fund and the Employment Subsidy Scheme reflect the Government’s commitment and determination in assisting companies overcome this difficult period. Between these two schemes we are investing €235 million directly into enterprises and safeguarding thousands of jobs and securing our enterprise capability in the process.

Employer Jobs (PRSI) Incentive Scheme

The Government is also encouraging employers to create new jobs through reducing the costs associated with emplyment. Under the Employer Jobs (PRSI) Incentive Scheme, where an employer creates a new job and takes on a person who has been unemployed for 6 months or more, the employer will be fully exempted from the liability to pay PRSI for the first year of that employment.  This will give employers an 8%-10% saving on employment costs for each new job created. It will actively encourage the creation of new employment now when it is most needed.

The PRSI exemption for employers creating new jobs this year is in addition to the maintenance of the substantial capital investment programme across Government. Included in this is the National Development Programme and the implementation of key Government programmes such as the €425 million Rural Development Programme 2007-13, which is creating some 12,000 jobs, and the €1 million invested each week in the Home Energy Savings Scheme, providing work for some 3,690 registered contractors.

The Government is also investing substantially in the provision of key infrastructure, such as broadband, where the number of subscribers has doubled during the lifetime of this Government and electricity generation from local renewable sources, where at 15% we have already met our target for 2010.

Upskilling the Unemployed

As I said at the outset, the Government remain fully committed to upskilling the unemployed so that they are successful in getting back into employment.

I and my Department are proactively leading the Government’s response to Ireland’s unemployment level and driving implementation of the Framework for Sustainable Economic Renewal. The Cabinet Sub Committee on Economic Renewal is also ensuring a coordinated approach across Government Departments in response to the rising numbers of the unemployed.

This approach has included a substantial increase in the number of job search, training and work experience places available to unemployed people.

Prioritisation of Cohorts for Support

We are also focussing our resources on a number of key cohorts of the unemployed which include:

• The lower skilled
• The long term unemployed
• Those under 35 years of age and
• Those formerly employed in the manufacturing, construction and retail sectors.

These cohorts have been prioritised as they are most likely to drift into very long-term unemployment.

The Government is investing substantial resources in tackling our unemployment problem. For instance through my own Department will this year invest over €1 billion in the provision of a range of labour force measures.

Job Search Supports

As regards jobsearch supports, in 2009, FÁS employment services together with the Local Employment Services doubled their capacity. This means that the annual referral capacity under the National Employment Action Plan rose from 78,000 persons in 2008 to 147,000 persons last year.

Training measures that have been introduced

The additional resources allocated by the Government to tackling the rising unemployment rate have also enabled my Department to significantly expand its activation training and work experience places.

This year the total number of training and work experience activation places funded by my Department will be approximately 147,000. This compares to the 66,000 places that were delivered in 2008 and the 130,000 places delivered last year.

The bulk of this additional provision has been due to the increase in training places on short courses for the unemployed. FÁS now provides modular based training so that participants can pick which modules they most require to improve their skills and ultimately increase their employability, whilst maintaining a close link to the labour market.

In addition, training courses are being delivered in innovative formats such as online, blended learning and night courses. In this way we are providing a range of delivery methods in addition to the traditional classroom approach, which enables more people access the services of FÁS.

I would also like to take this opportunity to inform the House that, in addition to the places I have just mentioned Skillnets and FÁS will this year now be providing almost 10,400 training places for the unemployed or those on short time working.

Due to the economic downturn there are now many individuals who are working for two or three days each week and receiving social welfare payments for the days they are not working. Both Skillnets and FAS are providing training opportunities for those in this situation. Individuals participating on these programmes can avail of training for the days they are not working while retaining their social welfare entitlements subject to the normal social welfare rules applying. This means that these individuals will now be able to use their reduced working week as an opportunity to upskill themselves thereby improving their employability.

Tackling Youth Unemployment

The Government is acutely aware of the large numbers of people who are under 25 and are now unemployed. That is why the Government have decided that this cohort will receive priority access to the State’s supports for the unemployed such as the FÁS employment and training services. I have also asked FÁS to make significant prioritisation of services for the under 25s a key element in their provision in 2010.

An initiative has also beenput in place to immediately activate 18/19 year olds, instead of waiting the usual 3 months for this automatic activation.

The main specific provision for early school leavers continues to be training at Community Training Centres and Vocational Education Committees under the Youthreach Programme. The Government is maintaining the 6,000 places available in this programme at a cost of approximately €110 million.

Another important initiative, which would be of particular relevance to this cohort, is the Work Placement Programme which has 2,000 places, of which 1,000 are for graduates. Participants on the programme gain work experience for a period of up to nine months and may retain their social welfare entitlements subject to the normal Social Welfare rules applying. This work experience will significantly improve their chances of securing paid employment in the future.

Support for Redundant Apprentices

As regards support for redundant apprentices, the Government has implemented a variety of measures, which will support around 4,000 redundant apprentices to progress their apprenticeships.

Examples of the measures introduced include:

• Agreeing with ESB networks to take on 400 redundant apprentices at phases 5 and 7, over a period of eighteen months,
• Amending the rules for off-the-job trainingto facilitate redundant apprentices progress their apprenticeship, and
• Introducing the Employer Based Redundant Apprentice Rotation Scheme to facilitate and support employers to provide on-the-job training for redundant apprentices. A new Scheme for 2010 will be announced very shortly.
• The Institutes of Technology are providing a Programme for redundant apprentices, which will provide them with a Level 5 FETAC award and it allows for access and transfer of credits to other post-apprenticeship programmes.

Education Supports for the Unemployed

The Education sector has also been very proactive in responding to the need for increased offerings for the unemployed.

This can clearly be seen in the significant increase in the number of Back to Education Allowance recipients, which has increased to over 18,000, many of whom are participating in further and higher education programmes.

In the further education sector this year an estimated 126,000 learners will benefit from part time learning opportunities for the low-skilled, the disadvantaged and for those who are unemployed.

In addition, 40,000 learners will benefit from full-time further education opportunities under the Youthreach, the Vocational Training Opportunity Scheme and the Post-Leaving Certificate programmes. These programmes are targeted at the unemployed or are specifically designed to enhance participants' employability.

In relation to the higher education sector there is clear evidence, which shows that increasing numbers of people are choosing to pursue third and fourth level education. This is a welcome trend at a time of reduced opportunity for school leavers entering into the labour market. The total number of full-time enrolments in universities and Institutes of Technology is projected to be over 140,000 for this academic year, an increase of 4.5% on the last academic year.

During 2009, a number of new initiatives were taken by the higher education sector to support unemployed people return to education and engage in upskilling. Over 900 unemployed people participated in short courses in the Institutes of Technology and 160 students undertook accelerated Level 6 programmes.

In addition, from September 2009, almost 1,000 free or highly subsidised part time places were offered to unemployed graduates to pursue postgraduate programmes in higher education institutions. A further 800 places were offered to part-time undergraduate courses. Both the undergraduate and postgraduate courses that were provided under this initiative were in areas that support the goals of the Government’s Smart Economy Framework and meet the future skills needs of the economy.

Support for Employment in Communities

In terms of social inclusion and supporting local employment in our communities the Government remains fully committed. Since the last two Budgets I have increased the number of places on Community Employment by 900. This means that this year there will be almost 23,300 Community Employment places.

Labour Market Activation Fund

I have also announced the creation of a €20 million Labour Market Activation Fund. This Fund, which is being managed by my Department, will seek to support innovative proposals over and above mainstream provision for the unemployed. The Fund will be open to the public, private and community and voluntary sectors to submit applications.

It is expected that this Fund will provide at least 3,500 training places this year. The Activation Fund will target the low skilled, and those formerly employed in declining sectors such as the construction, retail and manufacturing sectors, with a particular focus on those aged under 35 and those over one year unemployed. Successful proposals will be those that can show that they will provide the unemployed with skills that are in demand to enable them secure employment or to progress them on the pathway to employment. A call for proposals is expected to be issued in the very near future.

Conclusion

This evening I have highlighted the Government’s strategy of creating jobs, supporting enterprises, protecting vulnerable jobs and providing those who are unemployed with upskilling opportunities to get them into employment as soon as possible.

The Government has put in place a clear road map for Ireland’s recovery and one of the key elements in this strategy is the stabilisation of the public finances. This recovery strategy has received support from the European Commission and the international markets and it is vital that for the sake of our country we do not deviate from this plan.

The Government is therefore determined that Ireland will emerge from this period of extraordinary economic change on the path to economic recovery and strong employment growth. It is a significant challenge but one which in my view we are well on the way to achieving.

Thank you.

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