Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Cathaoirleach. I am pleased to discuss my Department’s 2022 Estimate with the committee this morning. I understand that the secretariat has been provided with a briefing relating to the detail of the Estimate, which hopefully has been of assistance to members.

Before outlining some of the specifics of our Estimate and plans for this year, I would like to say a few words about where we now find ourselves, not least in terms of the battle against Covid-19. Undoubtedly, the past two years have been traumatic for large parts of our society. The roller coaster of the pandemic and the impact of the various waves of the virus is something that none of us had ever experienced before. As a nation we have shown solidarity and resilience and have learned to adapt to the various challenges.

Despite the damage that has been inflicted by the pandemic, most sectors of the economy are now recovering well, with strong growth in domestic demand and high numbers of workers returning to employment. It is worthwhile to note that the unemployment rate for all persons, including those on the pandemic unemployment payment, was 7.5% in December 2021, down from 21.7% in December 2020. Since the start of the pandemic we have aimed to minimise the loss of life, protect the health service and save as many jobs and businesses as possible. The Government was not found wanting when it came to supporting the economy and jobs, providing a robust and sustained multi-billion euro package that compares well internationally. The employment wage subsidy scheme, EWSS, has been extended even though many other countries have ended their furlough schemes. The rules for the Covid restrictions support scheme, CRSS, have been relaxed and tax warehousing has been extended.

Turning to my own Department, the 2022 Estimate provides us with a gross allocation of €903.8 million, €358.8 million in current and €545 million in capital funding. Excluding the significant one-off Covid funding provided in 2021, mainly through the restart grants, our core funding has been increased by more than €100 million this year. In addition, we will also have a further €79.66 million in capital carryover and a further €80 to 90 million in own resource income for use this year. This additional funding will allow us to increase the core allocation to Intertrade Ireland by €1.2 million to enable it to launch new initiatives including a trade information service and a supply chain initiative.

Our enterprise agencies continue to help sustain and grow our enterprise base. The net increase of 31,736 new jobs created by the clients of Enterprise Ireland, IDA Ireland and the local enterprise offices, LEOs, in 2021 was remarkable, considering the significant headwinds of Covid and Brexit. In fact, Enterprise Ireland announced that Irish exporting companies recorded their highest ever jobs gain in 2021, while IDA Ireland also announced the highest ever jobs gain in the multinational sector in a single year. We are well on our way to reaching the Government target of having 2.5 million at work in Ireland in 2024. I have spoken before about my belief in the ability of the economy to bounce back strongly and although these figures do not capture the experience for all Irish businesses, they are certainly grounds for hope and positivity. I am, however, very aware that some sectors continue to suffer and struggle, especially tourism, hospitality, aviation, entertainment and the arts. Core capital funding to IDA Ireland next year is being increased by €26.5 million. This will allow the authority to expand its regional property programme which continues to provide property solutions in locations across the country. It is worth saying that more than half of all investments won by the authority in 2021 went to locations outside of Dublin. There was foreign direct investment-related employment growth in all regions.

Some €7 million will be provided to progress the expansion of the National Institute for Bioprocessing Research and Training to promote biopharmaceutical investment in Ireland. Additional funding of €4 million is being allocated to the advanced manufacturing centre in Limerick, which will provide a state-of-the-art facility for both indigenous and multinational companies to develop new technologies.

The IDA Ireland grants budget is also being increased by €5.5 million. Core capital funding to Enterprise Ireland is being increased by €31 million. This includes allocations to the climate enterprise action fund and the digital transition fund, which I will return to later in my contribution. Funding is being provided for further calls of the regional enterprise development fund and the online retail scheme.

Last year, in excess of 7,400 new jobs were created by LEO clients, which is an increase of 3,000. The additional €2 million in core capital funding for the LEOs will be targeted at providing increased training and related supports to assist SMEs, particularly in the areas of climate change and digitalisation.

Balanced regional development will continue to be a focus for us this year. The new regional enterprise plans, due to be published shortly, will identify growth opportunities and strengthen collaboration between local stakeholders to promote job creation.

The plans build on the core activities of IDA Ireland, Enterprise Ireland, the LEOs and other State bodies.

In addition to existing streams of funding, the new plans will benefit from funding under the European Regional Development Fund, ERDF. The disruptive technologies innovation fund, which stimulates the development and commercialisation of groundbreaking technologies, will receive an additional €35 million to allow for a further call this year.

Other initiatives being funded from the Department's core capital allocation include an increase of €3 million for the European Space Agency programme, in line with the commitment under the national development plan, Project Ireland 2040.

The Revised Estimate has also allocated discrete capital funding of €17 million for Covid measures this year. This allocation, together with the capital carryover of €79.66 million, essentially means that almost €100 million is available to respond to Covid-19 in 2022. The Covid credit guarantee scheme, for example, has been allocated €45 million to meet any claims against the guarantee this year. Further funding is being provided to other Covid measures such as the sustaining enterprise and accelerated recovery funds and the Covid products scheme.

While coping with Covid, many businesses have also had to continue to prepare for and deal with Brexit. The Department and its agencies continue to assist businesses in those sectors most impacted. The additional funding provided in the 2022 Revised Estimate, including funding secured from the Brexit adjustment fund, will ensure that targeted measures, such as the Enterprise Ireland food transformation scheme and the Brexit impact loan scheme, can continue to be accessed by businesses.

The 2022 Estimate also increased our current funding for this year by more than €13 million. The additional funding will allow for extra resources to be provided to the Department's regulatory bodies and enterprise agencies. In particular, increased funding will be provided to the Workplace Relations Commission, WRC, and the Competition and Consumer Protection Commission, CCPC, to allow them to recruit additional staff and meet the increasing demands for their services.

The budget of the new Corporate Enforcement Authority is being increased to ensure that it has the requisite resources to carry out its role as a robust, statutory and independent agency.

Additional current funding is also being provided to the IDA to promote and market Ireland for the purposes of FDI.

While, understandably, Brexit and Covid have been our focus in recent times, the challenges of climate change and digitalisation are also important and will be even more so in the future. The challenge of digitalisation and the imperative for businesses to embrace digital technologies is crucial to our post-pandemic economic recovery. To boost the uptake of digital technology in enterprises, we have set up the digital transition fund as part of our national recovery and resilience plan. This comprises €85 million in multi-annual funding which will run to 2026. The €10 million in funding being provided to the fund in the Revised Estimate this year will be targeted at increasing digitalisation of all businesses across products, processes, supply chains and business models.

Separately, €3 million will be provided to establish Ireland's European digital innovation hubs as part of a Europe-wide network. These hubs will be designed to make digital technology more readily available to SMEs and to provide advice, expertise and opportunities to experiment with technologies such as cybersecurity, AI and high-performance computing.

Under the allocation to Enterprise Ireland, €10 million is being provided to the climate enterprise action fund to assist Irish companies to build the capabilities required to deliver sustainable products, services and business models. This €10 million will also go towards the development of a carbon reduction fund, which will be aimed at encouraging manufacturing enterprises to engage actively in green research, development and innovation. The Climate Toolkit 4 Business website is now live, providing businesses with a tailored assessment of their carbon footprint. The kit was designed specifically to provide businesses, particularly small businesses, with an easy-to-use carbon calculator and generates an action plan specific to the business to help it to get activated in carbon reduction.

Before I finish, I wish to mention briefly some other items on my agenda for 2022. Over the coming months I will take the lead on behalf of the Government in creating five new workers' rights. These are as follows: a new public holiday; the right to request remote, home or hybrid working to complement the new right to disconnect; new redundancy rights for people laid off during the pandemic and subsequently made redundant; statutory sick pay; and the protection of tips and gratuities. With the help of members present, I hope these will all be in place by autumn, certainly by this year. We will also make progress towards a living wage for Ireland and universal occupational pension coverage for all workers through auto-enrolment.

I hope the foregoing gives an outline of my Department's 2022 Revised Estimate and a flavour of our plans for this year. I look forward to discussing the Estimate with the committee and answering members' questions.