Mr. Fergal O'Brien:

On the issue of costing pre-budget measures, I agree that the more clarity we can bring to this debate, the more useful it is. In our pre-budget submission, we have carried out some very extensive analysis on the jobs initiative package, the lower rate of VAT and the lower employer PRSI. The committee will see this in the annexe to our document. We have analysed the jobs being created and assessed the counter-factual if the measure had not been introduced. We conclude that the cost to the State looks like being in excess of half a billion euro, but the benefit is between €40 million and €140 million greater than that sum. In other words, we see a net gain to the Exchequer of the jobs initiative package of between €40 million and €140 million and we estimate that it is sustaining or creating in the region of 25,000 jobs a year. That is not just the 9% VAT, it is also the lower rate of employers' PRSI. All of the detail on that is in our submission. I reiterate that it is important to analyse those net benefits and not just growth costs in that assessment.

On the point about the growth in casual or part-time employment and whether there is any structural shift or more permanent changes in the labour market, it is far too early to judge. We are seeing what one would expect to see in any initial stages of economic and labour market recovery. Employers do not have the confidence to take on permanent employees. The labour market will first recover in the part-time, flexible and casual employment. We have observed that over several quarters. I took a lot of confidence and comfort from the fact that the most recent labour market numbers which we received in the past couple of weeks for the first time showed a significant increase in full-time employment. We will see more of that as confidence returns to the economy and as business and employers become more confident of their own outlook and have the confidence to take on full-time and permanent employees. It is far too early to say that we are seeing a structural or increased shift to casual employment. This is what we would expect to see at this stage in jobs recovery.

On the subsidisation of employment, given the severity of the crisis we have just come through, we need to do everything we can to attach people to the workplace. That is the first priority, to get as many as possible going back into work, even if it is not the nature or type of work they would like to be doing in five years’ time. Schemes such as JobBridge have been incredibly successful in bringing people back into the workplace. All the evidence coming from that has been that people are getting permanent and long-term sustainable employment opportunities. Of course, in something of that scale there will be exceptions and individual cases that have not been treated as they should have been, but by and large it works and is connecting people to employment. It is very positive.

I will touch on one or two of Senator Hayden's comments. In respect of investment priorities, we think the best stimulus for the economy at the moment is to reduce the fiscal adjustment. We have said that should be in the form of no new tax increases, but because of what has been achieved in the past couple of years around correcting the public finances, we now have a range of options. In particular, we are back into the market for public private partnerships. There are other funding options we can consider and we can achieve more in conjunction with the European Investment Bank.