Aideen Hayden (Labour) | Oireachtas source

I thank the Minister of State for appearing before the committee. With regard to country specific recommendation No. 1, dealing with financial consolidation, we must note that there has been a significant increase in tax revenue in this country recently and also a significant real drop in public expenditure. I do not believe we should agree to taking another €2 billion out of the economy. Last year the Joint Committee on Finance, Public Expenditure and Reform listened to the views of a number of actors, including the Irish Business and Employers Confederation, IBEC, the Small Firms Association and others who, surprisingly, at that time and without the continued improvement we have seen in the economy, were very concerned that to remove any additional expenditure from the economy would have an adverse effect. In fact, when it comes to removing money from areas such as social welfare expenditure, the knock-on effect on the wider economy is even greater. I raise that as a caution in respect of CSR No. 1.

With regard to the active labour market policies and the related matter of social inclusion, I am very concerned about what the Minister of State referred to in his statement as low work intensity, which is the official EU indicator for households with little or no paid employment. It is probably something we do not say often enough but it is important to point out that at the height of the Celtic tiger economy, in the period 2004 to 2007, this country had the second highest level of households with no member of a family employed. It is important to emphasise that in the European context. We are now ranked as the highest, but to go from number two to number one at a time when the bottom has fallen out of the economy is not entirely a surprise. There is a serious structural issue with households that are experiencing severe long-term unemployment. While we are making progress with people who have experienced unemployment over recent years, we have a structural problem with the long-term unemployed.

I welcome initiatives such as the introduction of the housing assistance payment, which allows people to move out of dependency on rent supplement and to go back to work. In my experience, when people have the ability to move on to a differential rent system, they tend to go back to work. They want to work. There are structural issues in terms of State payments and it is important we deal with them.

On the SME finance sector, I have a serious concern about SME procurement and I have raised it on a number of occasions. It has been my personal experience that often when the State puts work out to tender, it puts in request for tender requirements on companies and SMEs that are simply unrealistic. I can give an example.

I was involved in a request for tender for free legal services in a previous life when I was on a State board. The value of the contract was no more than €15,000, yet there was a requirement for €3 million in insurance. It is outrageous to look for that amount of insurance for a job worth €15,000.