Mr. John Murphy:

Mr. Patrick Rochford is not present, but he will join us for the second session. I am accompanied by Mr. Martin Shanahan, Ms Nina Brennan and Mr. William Parnell.

I thank the joint committee for giving me the opportunity to discuss the Action Plan for Jobs in general. We are all aware of the scale of the jobs challenge continuing to face Ireland and the wider European Union at this time. Behind every job lost there are families and businesses struggling to cope with the impact of the downturn. This is not what we want for the economy or society, which is why in Ireland the Government has put the jobs and growth strategy centre stage and made job creation our key priority, matching the priorities agreed in Europe through the Europe 2020 strategy and the various flagships, including the industrial policy flagship. Overcoming the jobs challenge will be greatly enhanced by improving Ireland's and Europe’s competitiveness. This will reduce the cost of enterprises doing business here and also make our economies attractive for multinational corporations in which to invest in their latest projects.

In essence, every economy must continue to adapt to be able to compete and win when faced with the constant flux in global supply and demand. Ensuring we are competitive will give us that ability to adapt and win. As a tool to give us that adaptability, the Government has put in place the Action Plan for Jobs with a dual mandate of encouraging growth and creating and maintaining jobs in the economy. The intention is to transform the economy that suffered so badly during the economic crisis into an economy built on enterprise, exports and innovation. The Action Plan for Jobs does not purport to be a silver bullet that will change our economic fortunes overnight, rather it is about grinding out transformations in how we support business, one by one, to make Ireland a better place in which to do business.

Since it was introduced in 2012, the Action Plan for Jobs has been one of the Government’s key instruments to support job creation.

The objectives of the action plan are to support the creation of 100,000 jobs in the economy by 2016, have 2.1 million in work by 2020 - the original figure of 2 million was revised upwards in the medium-term economic strategy - and make Ireland the best small country in which to do business. It is proposed to achieve these objectives by improving the environment in which businesses operate, encouraging entrepreneurship, helping Irish companies to grow and increase their exports and continuing to attract investment from abroad. The action plan has placed job creation at the centre of policy formulation for all Departments and changed the way in which government operates.

The 2012 Action Plan for Jobs contained 270 actions for delivery across government. Each action was broken down into quarterly milestones which were reported on in published progress reports at the end of each quarter. Some 249 or 92% of the 270 actions were delivered on in full in 2012. Those that were not delivered on either carried forward to 2013 or were replaced by others.

The 2013 Action Plan for Jobs contained 333 actions, including seven disruptive reforms or key initiatives, which were chosen for their potential to make a significant contribution to job creation and-or economic growth in the medium term. Again, implementation of the 2013 quarterly deliverables in the first three progress reports published to date has been high, at approximately 90%. The fourth progress report for 2013 will be published shortly.

The Minister is finalising the 2014 Action Plan for Jobs on behalf of the Government. This year's plan will build on the success of 2012 and 2013 and again set out a series of ambitious commitments on the part of the Government to support job creation and retention. Supporting entrepreneurship and small and medium enterprises will be a key element of the 2014 plan which will also contain a number of new initiatives that build on the disruptive reforms approach of last year.

In the past three years Forfás has become increasingly involved in the central policy-making process in the Department, with the agency playing a leading role in the preparation of the annual Action Plan for Jobs. Forfás has worked closely with the Minister, officials in my Department and other Departments and agencies in the development of the two action plans for jobs published to date. It is continuing in this role in the preparation of the 2014 plan. In addition, under the 2012 and 2013 action plans, it undertook significant sectoral reviews which were brought to the Government. For example, the agency prepared a new strategy for the manufacturing sector, Making It in Ireland: Manufacturing 2020, and an analysis and strategic plan for the construction sector, Ireland's Construction Sector: Outlook and Strategic Plan to 2015. It also prepared an analysis of the potential for employment growth in the social enterprise sector. All three reviews were published in the course of 2013. The agency also carried out many other significant research projects.

The system of quarterly progress reports is a key part of the Action Plan for Jobs architecture which ensures the Government holds itself to account in public on implementation of measures to improve competitiveness and support job creation, thereby maximising delivery rates. As I indicated, the implementation rate in 2013 was very high.

Budget 2013 contained a number of measures which supported the objective of the Action Plan for Jobs of supporting businesses to create jobs. The Minister for Finance followed the same approach in the recent budget for 2014. Creating jobs is the primary objective and last October the Minister announced that he was introducing 25 pro-business and pro-jobs measures. The total cost of the tax elements is in excess of €500 million in a full year. This significant investment is designed to help businesses in key sectors to achieve their full growth potential and create jobs.

On employment data, the Action Plan for Jobs set out a target of having an additional 100,000 people in work by 2016 from a baseline of 1.85 million in employment in 2012. The original action plan also set a target of having 2 million people at work by 2020. The Government’s medium-term economic strategy which was published in December has set a higher goal for 2020 and now aims to have more than 2.1 million people in employment by the end of the decade. While achieving these targets will be extremely challenging, recent data for employment have been encouraging. In quarter three of 2013 just under 1.9 million people were at work. This constitutes an increase of 58,000 people in employment compared to quarter three of 2012, net of reductions which are taking place in the public sector in which employment fell by nearly 4,000 in the same period.

Employment increases have been realised in agriculture, manufacturing, tourism, information and communications technology and professional services, all sectors that have been a focus for the Action Plan for Jobs. Last year IDA Ireland client companies created 7,071 net new jobs, while Enterprise Ireland companies created 5,442 net new jobs. These jobs directly created with the support of the State's enterprise development agencies are supporting in the order of a further 8,500 jobs in the economy. This figure has been calculated using a conservative multiplier of 0.7.

The seasonally adjusted unemployment rate fell from a peak of 15.1% in the first quarter of 2012 to 12.8% in the third quarter of 2013. The long-term unemployment rate decreased from 8.9% to 7.6% over the year to quarter three 2013. Unemployment has now fallen for six consecutive quarters. It is also heartening to note that consumer confidence is at an all-time high compared to six years ago, property prices are rising in some areas of the country and more tourists are visiting. While it is difficult to state with certainty what impact the Action Plan for Jobs has had on the improved labour market figures - there are a range of factors at play in the recovery of the economy - it is clear that a coherent and consistent public policy approach to addressing barriers to job creation is important.

Some of the key deliverables on the part of government which are clear action plan initiatives include the establishment of a suite of new financial instruments for small and medium enterprises, including the micro-finance fund, the credit guarantee scheme and three National Pensions Reserve Fund funds for SMEs. In total, various Government-sponsored schemes, together with private sector investment, are making more than €2 billion available in non-bank financing to business. New structures have been put in place in Enterprise Ireland to assist companies seeking to grow their exports and the number of trade missions has been increased. A strategy for manufacturing was published in 2013, providing a long-term vision for the manufacturing sector to help to realise the Action Plan for Jobs target of 20,000 additional jobs for the sector. The JobsPlus initiative which was launched in the middle of 2013 provides a subsidy for employers who recruit a person who has been on the live register for 12 months or more. A new health innovation hub was piloted in 2012 and built on in 2013 to establish Ireland as a leading location for start-up and growing medical technology and health care companies. A €35 million energy efficiency fund has been established by the Minister for Communications, Energy and Natural Resources to support improved energy efficiency in the public and commercial sectors. This investment will be more than matched by the private sector. Approximately 20 exemplar projects have been selected for support through the fund.

In March 2012 the Government launched the Succeed in Ireland initiative, which aims to create 5,000 jobs within five years by targeting international companies and business people who would not otherwise be reached by the State enterprise agencies to bring employment opportunities to Ireland. Supports for micro-enterprises are being fundamentally restructured to create new local enterprise offices which will be first-stop shops for anyone wishing to set up a new business or seek business advice. Upskilling for those who are unemployed is being provided through courses such as Springboard and MOMENTUM. The ICT action plan is placing a particular emphasis on addressing the skills gaps in the information and communications technology sector.

The action plan has had wider impacts in terms of government administration. At an overall level, the Action Plan for Jobs process has encouraged a whole-of-government focus on supporting job creation in the economy. It has resulted in a breaking down of silos across Departments and produced a more collaborative approach across the public service, with the aim of delivering employment objectives. This is most evident in the disruptive reform projects, which generally require a collaborative approach on the part of a number of Departments and agencies, for example, the health innovation hub involves my Department, the Department of Health, Enterprise Ireland and the Health Service Executive in bringing together businesses and clinicians to identify enterprise solutions to medical issues.

The transparent and rigorous monitoring of commitments on a quarterly basis has also speeded up the process of getting initiatives across the line. The process is carried out by a monitoring committee co-chaired by the Secretary General to the Government and me and involves the Departments of Jobs, Enterprise and Innovation, the Taoiseach and Public Expenditure and Reform and Forfás. The Tánaiste’s office is also represented on the committee.

The disruptive reform projects have also introduced a new approach to the delivery of key initiatives, with the involvement of industry partners.

There are six industry champions helping to deliver the disruptive reforms, each of which was selected on the basis of its proven track record in developing businesses and creating jobs. They have brought their experience and insights to help to provide greater synergy between the public and private sectors in delivering on the key disruptive reform projects.
Through the Action Plan for Jobs 2012 and 2013, the Government has focused on creating a supportive environment for businesses operating in Ireland. The action plans have included a range of concrete measures to address issues which impact on our competitiveness position. The implementation of these actions, combined with the Government’s exit from the troika programme and its return to international funding markets, will play a key role in improving our competitiveness further and realising our ambition of making Ireland the best small country in which to do business. Ireland is currently rated highly internationally in international competitiveness rankings and we have built a strong base on which to compete in global markets. Ireland has moved up to 17th place in the IMD’s World Competitiveness Yearbook 2013, having being ranked 24th only two years ago. It is ranked 15th in the World Bank’s Doing Business 2014 report, while Forbesmagazine recently named it as the “Best Country for Business”, up from sixth position in the previous year.
While Ireland’s competitiveness has improved and the numbers in employment have increased, we must continue to do more to ensure these competitiveness gains are not eroded as the economy begins to recover. The Action Plan for Jobs will continue to be the key vehicle for the identification and delivery of specific policy measures that will bring further improvements to our competitiveness position and support job creation. Through the Action Plan for Jobs 2014, the Government will continue to build on the progress already achieved, as we continue to transform the economy from one based on unsustainable debt to one based on enterprise, innovation and exports. The 2014 action plan is being finalised and set to deliver a further suite of actions to support enterprise.
The Action Plan for Jobs process is relatively new. There have been clear signs of stabilisation in the labour market, with the sustained increases in overall job numbers in the past 12 months. The extent to which this improvement can be directly attributed to the Action Plan for Jobs is difficult to assess at this point. Other factors such as the stabilisation of the euro, undoubtedly, come into play in supporting business confidence. However, given the administrative change brought about in setting and measuring the delivery of quarterly commitments, the enhanced co-operation between Departments and agencies and the singular focus on the jobs agenda across government, it is fair to say that, in tandem with other Government policies, the Action Plan for Jobs process is making a positive contribution to the enterprise environment.