Oireachtas Joint and Select Committees

Tuesday, 1 April 2014

Joint Oireachtas Committee on European Union Affairs

National Reform Programme for Ireland 2014: Minister of State at Department of Foreign Affairs and Trade

2:20 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

We will resume in public session. On behalf of the committee I welcome the Minister of State, Deputy Paschal Donohoe, who has special responsibility for European affairs. He will brief the committee on the draft national reform programme update for 2014. The Government is consulting with the Oireachtas on the draft document in advance of its consideration by the Cabinet and its submission to the European Commission in Brussels, which must take place in April.

The preparation of a national reform programme is a key input for each member state as part of the annual European semester process for economic policy co-ordination. Ireland is now participating fully in the 2014 European semester process and this is the first time we will submit a full national reform programme. Today's meeting is welcome in the context of the European semester, and as part of the evolving engagement with the Oireachtas, to ensure the necessary democratic accountability and legitimacy of the process.

I will ask the Minister of State to address the committee in a minute. Before I do so, I wish to inform him that we have just had a very useful session with Councillor Fiona O'Loughlin, a representative of the Committee of the Regions. She was kind enough to give her committee's views of the national reform programme. No doubt a copy of that presentation will be made available to him. Some of the comments that she made will be raised by some of this committee's members, because we are trying to ensure they have an input into the programme.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the committee for the opportunity to make this presentation. A copy of my speech is on its way to the committee and we will have an opportunity to circulate it during the session.

First, I thank the committee for its invitation to join members here today and welcome the opportunity to engage with them on the European semester process and the preparation for Ireland’s national reform programme, NRP, a draft of which I understand has been circulated to the committee. Engagement with national parliaments is rightly regarded as an important part of the process. I believe it is an essential aspect underpinning its democratic legitimacy. In addition to this session, issues related to the semester are being considered in other sectoral committees, which is very welcome. In this regard, I understand that the Minister for Finance will separately arrange a briefing for members of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform on our stability programme update, SPU, which will be submitted to the Commission alongside the national reform plan in the coming weeks.

I wish to emphasise something the Chairman said earlier. This draft, which has been circulated to the committee, was agreed and noted by the Cabinet this morning. Therefore, we are holding this session with the committee as soon as we possibly could and are making a draft of the document available to it in order to facilitate as much discussion and engagement with the document as is possible.

Before addressing the contents of the national reform plan I would like to set the context against which the plan is being prepared. This year, as has already been said by the Chairman, is the first time Ireland will be a full participant in the European semester process. As a result, we will receive fully-fledged country-specific recommendations, CSRs. Previously, we were only required to continue implementing the terms of our EU-IMF programme. It is, therefore, an important statement of how we see the reform undertaken as part of the EU-IMF programme being carried forward into the future under our own steam and direction.

It builds on the medium-term economic strategy that the Government published in December, which provides the overall framework for our future economic development. The mid-term economic strategy is based on three pillars, which are reflected in the national reform plan. They are as follows: ensuring debt sustainability, financing growth, and supporting employment and living standards. The three pillars are closely interlinked and inter-related. We will not be able to deliver growth and job creation unless we get our spending under control and ensure that our debt is at safe levels. Action on all fronts is mutually reinforcing.

The submission of the national reform programmes in mid-April is an important milestone in the European semester process. As the committee will be aware, the process begins in the autumn with publication of the Commission’s annual growth survey. This identified five priorities for member states to pursue: pursuing growth-friendly fiscal consolidation; restoring normal lending to the economy; promoting growth and competitiveness for today and tomorrow; tackling unemployment and the social consequences of the crisis; and modernising public administration. I would make the same point regarding these objectives as I made in relation to the objectives of the national reform plan and the medium-term economic strategy, which is to say that they all reinforce each other.

Following the examination of national reform plans, and the stability programme updates that are submitted by member states at the same time, the Commission presents country-specific recommendations to member states at the start of June. These are tailored, concrete recommendations for reforms that are considered in the relevant Council formations - on what is called a "comply or explain" basis - and finally endorsed by the European Council at the end of June.

In the past the country specific recommendations given to other member states have covered such topics as public finances, pension systems, measures to fight unemployment, education and innovation.

The semester process embraces Europe 2020, the European Union's ten year plan, adopted in 2010, based around five headline EU targets in the areas of employment, innovation, climate and energy, education and social inclusion. Under Europe 2020 each member state adopts national targets in these five areas and progress is monitored within the framework of the European semester and reported on annually by member states in their national reform plans. The Commission recently published a communication outlining a process to review the Europe 2020 strategy and I encourage the committee, as well as the sectoral committees, to engage with this process. I believe this was a subject of engagement between the committee and the Secretary General of the European Commission, Catherine Day, when she appeared before the committee recently.

Since exiting the EU-IMF programme of financial support the Government has made a strong commitment to maintain the reform momentum necessary to achieve our goals to support job creation and the enhancement of living standards. As I mentioned, the framework for this is the mid-term economic strategy. In the national reform programme which we are discussing we will be expected to report on progress made under our programme towards our Europe 2020 targets. We will also be mapping out the continuing process of reform that lies ahead. This will sit within the overarching framework provided in the mid-term economic strategy. While the national reform plan is expected to be reasonably comprehensive, it is also expected to be concise. As such, it is not possible to include every detail in every policy area, nor can the plan elaborate on the full extent of Government action across each issue.

The introduction of the plan that the committee has received provides an overview of our macroeconomic position and the policies being implemented to promote competitiveness, growth and job creation. These are in line with the priorities set in the annual growth survey. The Department of Finance’s current macroeconomic forecasts were published in October 2013, at the time of budget 2014, and will be updated closer to the submission date as the stability programme update is finalised.

Supporting economic recovery is the Government’s key priority. A very strong driver of our approach has been An Action Plan for Jobs which contains actions and targets for all Departments and State agencies. Its focus is to ensure all efforts are made to improve the overall enterprise environment, boost job creation and retention and bring about economic growth. The next part of the plan involves reports on implementation of our programme, including those which have been the subject of follow-up action in recent months, including health, legal services and debt overhang in the economy. As we are well aware, there are many challenges facing the health and social care system. In 2012 the Government published Future Health outlining how it would reform the health system across the four strands of health and well-being, structural reform, services reform and financial reform. The aim is to achieve a sustainable health and social care system which ensures access to high quality services based on need, not income. Arising from this plan, the Department of Health is actively taking forward an ambitious reform programme.

The Commission has also expressed an interest in reform in the area of legal services. As the committee will be aware, the Legal Services Regulation Bill is advancing with the aim of establishing the new Legal Services Regulatory Authority by the end of 2014. Enactment of this important legislation will better balance the interests of legal professionals and consumers of legal services in a way that is appropriate to a modern, open and recovering economy.

As regards debt overhang in the economy, a number of actions were completed pursuant to the EU-IMF programme to address non-performing SME loans and mortgage arrears. This work is continuing as a matter of priority for the Government. We recognise that SMEs are the lifeblood of the economy, playing a vital role in our recovery and job creation. We have, therefore, launched a suite of lending initiatives for SMEs. As set out in An Action Plan for Jobs, our focus for 2014 is on increasing new lending to SMEs; increasing participation in Government sponsored access to finance schemes for SMEs such as the microenterprise loan fund, the credit guarantee scheme, the seed and venture capital scheme, the seed capital scheme, the employment and investment incentive scheme, the National Pensions Reserve Fund, SME funds and the Credit Review Office; raising the level of awareness among SMEs and entrepreneurs of the full suite of developmental business supports available to them; enhancing the financial capability of SMEs; and enhancing research and policy evaluation of access to finance for SMEs. We are also stepping up our efforts to ensure the business community is aware of the supports available to it. This will principally be achieved through the newly established local enterprise offices. We have also developed an online tool which we will be rolling out in the near future to help SMEs to easily identify those programmes or supports of most immediate relevance to them.

I want to address our national targets under the Europe 2020 strategy. These targets are across all of government, for example, employment and poverty reduction strategies. They ensure effective implementation of our cross-departmental plan and, when delivered, will be mutually reinforced and supported by common policies. The first key area is employment, in which the target is to raise to 69% to 71% the employment rate for women and men aged 20 to 64 years, including through the greater participation of young people, older workers and low-skilled workers and the better integration of legal migrants, and to review the target level of ambition in 2014 in the context of a proposed mid-term review of the Europe 2020 strategy. For 2013, the employment rate for women and men aged 20 to 64 years was 65.5%, an increase of almost two percentage points from 2012. This increase demonstrates the beginning of an improvement in the labour market after a fall from a high of 74% in the employment rate in 2007 to 71% in 2008 and less than 64% in 2012. For us to reach the 2020 target, the employment rate will have to increase by 0.6 percentage points each year. We see this as feasible, provided the recent recovery is maintained into the medium term. We are continuing to tackle unemployment and support employment through the twin strategies of An Action Plan for Jobs and Pathways to Work. Key area of focus include competitiveness, entrepreneurship, support for the domestic economy and communicating the available supports more effectively. The Pathways to Work strategy, launched in February 2012, introduced a new integrated employment and support service, including the transformation of local social welfare offices into one-stop-shops called Intreo offices. In 2013 a renewed focus was given to targeting activation places at the long-term unemployed.

The Government is also moving to implement the EU youth guarantee, on a phased basis, within the Pathways to Work framework. Key plans will include developing the Intreo activation process to ensure earlier and more intensive engagement with young people; delivering opportunities for young people through education and training programmes; earmarking a quota of places and opportunities on employment schemes for young people; varying the eligibility conditions for access to these schemes by young people; expanding the number of opportunities availed of by young people in the form of internships, subsidised private sector recruitment and supports for the self-employed; and introducing new options for young unemployed people, in particular in the areas of youth entrepreneurship and international work experience and training.

Expenditure on programmes providing employment, training and further education opportunities for young people will be in excess of €500 million in both 2014 and 2015.

In Ireland, we have significantly increased our investment in this area over the past decade. As a result, Ireland has built a strong science base and has joined countries such as Finland, Germany and the US among the world’s top 20 countries for scientific output. Approximately two thirds of Ireland’s research and development is in the private sector, creating new product and service innovations that will drive exports, growth and jobs. This has been supported through a range of actions, including improvements in fiscal measures to support research and development, supports for links between higher education and industry, and supports for in-company research and development and start-up companies. As a consequence of this increased investment, the research intensity rate for Ireland in 2012 has been confirmed at 2.13% of GNP or 1.72% of GDP, affirming that Ireland is on track to achieve its research and development target by 2020.

The target for climate change and energy is to reduce emissions in the non-traded sector by 20% compared to 2005 levels; to increase the share of renewables in final energy consumption to 16%; and to move towards a 20% increase in energy efficiency. On climate change, under the 2009 EU effort sharing decision, which applies to greenhouse gas emissions outside the scope of the EU emissions trading scheme - in other words, the non-traded sector - Ireland must limit its emissions growth to 20% below 2005 levels during the period 2013 to 2020. This target under EU law is ambitious and challenging from an Irish perspective, particularly given the size of our agriculture sector and the scale of emissions associated with it. Our target for the period to 2020 consists of a series of declining annual targets, and compliance must be demonstrated with each annual target in turn. The Environmental Protection Agency publishes annual inventories of, and projections for, national greenhouse gas emissions.

We are on course to comply with the mitigation trajectory in the first half of the eight-year compliance period. Compliance in the years 2017 to 2020 is more challenging, and this is being addressed by the development of policy and legislation. In accordance with the commitment contained in the programme for Government to introduce primary legislation on climate change, the Minister for the Environment, Community and Local Government published outline heads of a climate action and low carbon development Bill in February 2013. Subject to the approval of Government, it is expected that the final heads of the Bill will be published in April 2014.

In anticipation of the planned primary legislation, a national low-carbon roadmap to 2050 is being developed. The road-mapping process will focus in detail on closing the distance to Ireland’s greenhouse gas emissions reduction target. It is intended that the first draft 2050 national low-carbon roadmap will be released, together with a draft strategic environment assessment, for a substantial period of open consultation later this year.

With regard to energy, the overarching objective of the Government's policy is to ensure secure and sustainable supplies of competitively priced energy to all consumers. The 2009 EU renewable energy directive set Ireland a legally binding target of meeting 16% of our energy requirements from renewable sources by 2020. To meet this target, Ireland is committed to meeting 40% of electricity demand from renewable sources, with 10% for transport and 12% for heat. In 2012, 7.1% of the State's overall energy requirement was met by renewable energy. As a percentage of the targets for each of the three sectors, this equates to 19.6% of electricity demand and 2.4% and 5.2%, respectively, of transport and heat power needs, being met by renewable energy in 2012. To date, wind energy has been the largest driver of growth in renewable electricity, contributing most towards the achievement of the 2020 target.

The national energy efficiency action plan, NEEAP, is the State's overarching policy framework for energy efficiency and contains a commitment to a 20% energy savings target across the economy by 2020 in pursuit of our EU objectives. Recognising that Government must lead by example, we are committed to achieving a 33% reduction in public sector energy use by 2020. At the end of 2012 we had achieved 36% of our national target. Nevertheless, the bulk of our target remains to be delivered over the seven years to 2020. Oversight of our action plan commitments is provided by the NEEAP implementation group, chaired by the Department of Communications, Energy and Natural Resources. Under the 2012 energy efficiency directive, all member states are required to submit a revised energy efficiency action plan by 30 April 2014 and every three years thereafter. The drafting of our next action plan is being finalised and will be published later in the year. Moreover, in summer 2014, the Commission will assess progress achieved to date by all member states and whether the Union is likely to achieve its 2020 energy consumption targets. Meeting the 20% national target and 33% public sector efficiency target will require sustained action across the public, industrial and commercial sectors, the deepening of retrofit activity and a significant shift in transport behaviours. The Government will bring forward over the next 18 months new initiatives to further stimulate energy savings across the economy.

With regard to social policy, targets in the area of education aim to address early school leaving and boosting the number of those with third level qualifications. Specifically, they are to reduce the percentage of 18 to 24 year olds with at most lower secondary education who are not in further education and training to 8% and to increase the share of 30 to 34 years olds having completed tertiary or equivalent education to at least 60%. The percentage of early school leavers in Ireland fell from 11.4% in 2010 to 9.7% in 2012. This represents positive progress towards achievement of our 8% target and the NRP provides detail on a number of measures that have been put in place to support its achievement. The latest EU data show that Ireland's tertiary attainment rate for 30 to 34 year olds was 51.1% in 2012. Since 2009, Ireland has had the highest rate for this indicator of all EU member states. In the tertiary attainment rate for 25 to 34 year olds indicator presented by the OECD, Ireland ranks first in the EU and fourth in the OECD.

With regard to poverty, the target is to reduce the number experiencing consistent poverty to 4% by 2016 and to 2% or less by 2020, from the 2010 baseline rate of 6.2%. This will lift at least 200,000 people out of the risk of poverty and exclusion between 2012 and 2020.

Following review in 2012, the Government agreed a revised and enhanced national social target for poverty reduction, which is to reduce consistent poverty to 4% by 2016 and to 2% or less by 2020, from the 2010 baseline of 6.3%. This is supported by a wide range of actions across diverse policy areas in the national action plan for social inclusion.

Unfortunately, the upward trend in the Europe 2020 target population highlights the social impact of the crisis in Ireland. We are awaiting publication of 2012 data from the CSO Survey of Income and Living Conditions, which will be published shortly and will give us a more up-to-date position on the social status of Ireland.

Recent research carried out by the Economic and Social Research Institute for the Department of Social Protection shows that social transfers are very effective in reducing income poverty - lifting almost 40% of the population out of the at-risk-of-poverty category. This performance has actually improved during the crisis, as the welfare system provided a crucial safety net for higher numbers unemployed. The ESRI research reveals that the share of total household income from social transfers increased very rapidly after the start of the recession, from 20% in 2004 to 30% by 2011. This was largely due to the rise in unemployment, leading to more people receiving unemployment-related payments, as well as to the fall in market incomes. In 2011, 87% of households received some social transfer income, up slightly from 85% in 2004. The ESRI research also finds a strong link between social transfers and poverty alleviation - reducing the gap between household market income and the poverty threshold by 88%, up from 84% in 2004. Ireland's performance in this area is at the top of the range of EU countries, with an overall effectiveness of 90% in reducing the poverty gap through social transfers. In recognition of the higher risks and lifelong consequences of child poverty, a new child-specific social target will be set in the forthcoming national policy framework for children and young people 2014-2020.

The draft NRP also briefly outlines how the use of our Structural Funds supports our efforts to achieve Europe 2020 targets. Ireland has been allocated approximately €2.19 billion in respect of the European Agricultural Fund for Rural Development and just over €1.2 billion in regard to the other funds over the period 2014 to 2020.

I have just gone through a gigantic amount of material and will conclude by emphasising a few points. While it might not have seemed like it, I hope it was a relatively succinct summary of a huge amount of material in the National Reform Plan. The National Reform Plan, and its role in the semester process, really demonstrates just how broad the semester process is and how many different social outcomes and social objectives are looked at in addition to the economic objectives, which, of late, we have unfortunately had to spend too much time discussing. It also demonstrates that in order for us to rise effectively to these social challenges and opportunities, it requires a breadth of response that stretches across many Departments as opposed to just one.

I suppose that leads on to a health warning for me in terms of my participation in this session, which is that a wealth of policy areas are covered and while I will obviously do my best to respond to any points members want to make in regard to the areas I have flagged, I should make it clear that this is part of a consultation session. One of the main objectives I hope to fulfil at this session is that by hearing what members have to say, I will ensure it is at least passed on to the relevant Departments and Ministers and included in our national process. I thank the committee for the opportunity to address it.

2:50 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

I thank the Minister of State for that comprehensive introduction to this year's national reform programme. As he said, it is a cross-committee issue, and we are lucky to be joined Deputy Michael Colreavy and Senator Michael Comiskey, who may take part in the proceedings and the questioning.

I spoke at a conference yesterday in Westminster about the European semester, where all the talk was about yesterday's statement by the Chancellor of the Exchequer, George Osborne, that the UK will now pursue an agenda of full employment. We have set employment targets for those aged between 20 and 64 of 69% to 71%, which is actually less than the EU target of 75%. Bearing in mind the agenda across Europe in regard to employment, does the Minister of State think we are being a bit pessimistic? Could we potentially do more with those targets?

I mentioned earlier that when we invited the Committee of the Regions to a meeting of this committee, one of the questions its members asked also related to targets. They were concerned that the targets were expressed at a national level and they wondered whether some sort of regional targets could be included so that we could see some sort of attempt to address the issue of balanced development across the regions. Will the Minister of State comment on that also?

Photo of Joe O'ReillyJoe O'Reilly (Cavan-Monaghan, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Minister of State for his presentation. The entire plan is highly laudatory, as are its objectives, which we support. Naturally, we will place individual emphasis and make individual comments on aspects of it. I had intended to start where the Chairman left off - that is, on the question of regionalisation. I missed the initial presentation from the Committee of the Regions. I am concerned that we would set overall national objectives without having a regional dimension.

Extraordinary progress has been made by Government in creating an environment in which 61,000 jobs have been created over the past 13 months in the private sector. That is an enormous achievement and something about which we should be very proud. The difficulty is that those jobs tend to be created in the major urban centres and in centres with large populations, and we all understand the arguments around that.

In the area I represent, which is represented very competently by Senators Reilly and Comiskey, we have a number of IT companies and PLCs. Broadband is now pretty comprehensively available and we have a good road infrastructure. There is no reason we should decide our region is not capable of creating jobs, of accepting inward investment and of having the personnel to make it work. I put it to the Minister of State that it would be very helpful if regional targets we set or, at least, if there was a commitment to regionalisation.

Yesterday, when I spoke at the British-Irish Parliamentary Assembly plenary session in Dublin Castle, I put it to Mr. Frank Ryan, chairman of the IDA, that I was very keen on getting jobs into the regions and places such as Cavan-Monaghan.

Mr. Ryan referred to the IDA proposals for a short and medium-term plan in the next few months. He made a commitment to look again at the question of bringing more jobs to the regions. Unfortunately I will not be present to hear the Minister of State's response but I would be very grateful if he could indicate his personal support for bringing a spread of jobs to the regions and embodying that target in the programme. There should be a commitment in writing to bringing jobs to the regions. I think the people we represent deserve not to be written out of the national economic recovery.

I welcome the excellent job activation measures. The Minister for Social Protection, Deputy Burton, deserves a commendation for her pioneering work on changing the concept of what was traditionally known as the dole - a paternalistic payment for bare existence - into a payment for people who are jobseekers in the real sense. These measures give people the opportunity to find employment. What has been done in the area of job activation is excellent. I am very happy with the written commitment to implement the youth guarantee, albeit incrementally, and I am interested in learning the targets that have been set for the short term. My colleague Senator Kathryn Reilly organised an excellent seminar on the youth guarantee scheme some weeks ago in Cavan. My colleagues who attended told me about the very good discussion. The experience in Finland would suggest that the youth guarantee is a concept that we should pursue.

Many young people cannot get an apprenticeship because of the decline in construction, a sector now experiencing a 60% rate of unemployment. Contractors who had small businesses such as plumbing and heating are no longer functioning. A young person who wants a trade cannot readily access an apprenticeship. I think there should be a commitment to simulated apprenticeships in colleges and schools. It is not beyond the imagination to create the same tasks in an artificial environment, so that young people can pursue an apprenticeship. Of course one would prefer if these young people were out in the real world, but unless we address this issue, there will be a dearth of tradespeople and many youngsters will miss out on this opportunity. In so far as they would need practical experience, could opportunities be created in public projects in conjunction with SOLAS?

The Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, has introduced a number of financial initiatives, but we need a State system to finance small business in parallel with the banking sector and the private sector financial houses. This would stimulate them to do better. We need an initiative to get small business going. I am happy with the increase in expenditure on research and development, which is vital.

The UN report, which was covered widely in the media, puts the issue of climate change and energy into perspective. The Minister of State was unnecessarily humble in suggesting that he would not be able to address all the areas, but I am sure he can. Is there a possibility that we can reduce the cost of wind energy? It is the most natural source of energy we have, but I understand it remains too expensive. Will the Minister of State comment on that?

Nobody wants to speak about the elephant in the room - nuclear energy. We have a NIMBY culture and some politicians pander to every group who want to stop development in the country. We must become more mature and, as politicians, give a lead to people. In the context of climate change and having to maintain our agricultural economy and reach the targets in Harvest 2020, we may have to look at new nuclear technology afresh. I ask the Minister of State to respond to that. It is too atavistic and simplistic to immediately dismiss nuclear energy. If I had to face a choice between nuclear energy and the dismantling of our agricultural industry, which creates jobs in my area, I would have no doubt as to what should be done. We have to examine how we can reduce our demand on energy, and in my view nuclear energy should not be dismissed totally. We should at least conduct a cost-benefit analysis of its use.

3:00 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

The Deputy has had eight minutes.

Photo of Joe O'ReillyJoe O'Reilly (Cavan-Monaghan, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome the targets set for early school leavers. I know it sounds outside the box, but the provision of two years of preschool education will alleviate poverty and in the long run will deal with much early school leaving. From my experience as a teacher I know that intervention at the youngest possible age is the way to deal with educational disadvantage.

Will the Minister give some thought to the leaving certificate applied course, which has been underplayed? It is the only outlet for the weaker academic student. We treat it as a Cinderella and there are insufficient outlets from it.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I will try to be brief. I thank the Chairman for inviting me to attend this meeting on the national reform programme. As I am a member of the Joint Committee on Communications, Energy and Natural Resources, most of my questions will be in that area. In my previous day job a programme meant more than a statement of objectives; one set out a map on how one would achieve the objectives. Once this programme is finalised, will a detailed map be drawn up for Government on how it will reach the objectives stated in the draft national programme?

On the question of energy generation, I would like to think in terms of the principles and practices of EU, national government and local government subsidiarity. I understand that member states have absolute discretion in determining their own energy strategies. I believe this has been confirmed by the EU. I am aware of the intensive lobbying by energy companies in respect of hydraulic fracturing, fracking of shale gas and also wind energy. I would not be surprised to learn of proposals for nuclear energy. I found it frightening that many MEPs would support a proposition that projects involving hydraulic fracturing might be considered without an environmental impact statement. I think that is the hallmark of successful lobbying by energy company lobbyists. It is frightening. While member states have absolute discretion to determine their own energy strategies, increasingly we will see discussions between member states on joint operations, just as we are seeing joint projects in communications. That is the natural way to proceed.

I am concerned that our independence in planning for the future will be jeopardised by increasing intercountry collaborations on energy projects. I am very concerned that energy companies, rather than the Government, will make decisions on energy policy and projects to suit the people.

My second point is on wind farms and the use of renewables in energy generation. While I understand Deputy Joe O'Reilly's point on NIMBYism, I would not support it. There is no doubt that wind energy and renewable energy projects are the future for this and other European countries. We wish to give them a fair wind and see them work. They work when they have the support of host communities and where the host communities clearly see a benefit arising for them. Our job and that of the Government is, first, to ensure we meet our own energy requirements before we even consider exporting energy supplies and, second, that host communities and Irish people in general see a clear benefit from renewable energy projects because only then will we have what we all want, a thriving renewable energy sector that benefits the people but one which has not been designed at the behest of well placed lobbyists.

My final point, if I can stray into the field of agriculture, is on greenhouse gas emission reductions. While we need to do everything we can to reduce our greenhouse gas emissions, this is a food producing country. That is what we do best and probably better than anywhere else in the world. I argue that it is easier, in the sense that there are more technical solutions, to reduce emissions from heavy industry or transport than to alter the biological functions of cattle who eat grass. There is a need to set out realistic and achievable steps to minimise agriculture-related emissions and monitor these steps to ensure they are being taken. However, we have to resist any attempt to penalise Ireland for what we are and what we do as a people. We produce excellent, natural food and should not be penalised for doing so.

I wish the Minister of State well. He has an important portfolio and the work he does will influence the direction the country will take in the future.

3:10 pm

Photo of Seán KyneSeán Kyne (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister of State. I will have to re-read the draft national reform programme for Ireland for 2014 as it is a comprehensive document. Everyone in the country should read it as it gives a clear and concise account of what the Government is doing on a range of issues and it is a very important document.
Considering that we have had engagement with the troika, does the Minister of State expect any surprise in the country specific recommendations or have these issues been dealt with? The five priorities for member states to be followed in the annual growth survey include modernising public administration, tackling unemployment, promoting growth and competitiveness, pursuing growth friendly fiscal consolidation and have been encompassed in the budgets we have introduced. Lending to the economy and SMEs continues to be a priority. Even though the pillar banks state they are following the targets set by the Government, anecdotally, businesses and SMEs state they are not. Does the Minister of State think there is a role for credit unions, notwithstanding some of the problems that arose in that sector in recent years? In general, they have a strong record and it is an issue that has often been raised with me.
A number of members referred to the need for a regional balance. When I was a member of the county council for seven or eight years at the height of the Celtic tiger when there was inward investment, the debate was about having a regional balance, not to mention within the country. Certainly, in terms of foreign direct investment, the phrase used was "critical mass of population" in the sense that large companies wanted to locate in Galway or any other city, rather than the regions. There is a challenge in that regard, but given that 50% of the population is in Leinster, there is a concern that this figure will continue to grow. Notwithstanding what Deputy Joe O'Reilly said about better road and public infrastructure nationally, there is ongoing concern about what is seen as a regional imbalance.
A number of contributors mentioned climate change and commented on yesterday's UN report which received much publicity and worrying commentary, some of which was based on estimates of the increases in global temperatures, ranging from 1.5° to much higher levels, and their impact and consequences. The issue of nuclear energy has been mentioned, while the single energy market was commented on at a meeting of the jobs committee. That is an important issue because the cost of electricity in Europe vis-à-vis our competitors in the United States is a concern. I am wondering about the progress made in dealing with the issue of a single energy market, bearing in mind the reliance of some countries on imported gas supplies from Russia. Obviously, we are all aware of the concerns about developments in that part of the world.
On the issue of tackling unemployment, the construction sector is a source of major concern. We have moved from an over-reliance on that sector during the Celtic tiger era to high rates of unemployment in it. It is evident that there is an increasing need for houses, particularly in the greater Dublin area and, possibly, some urban areas also. I hope there will be ongoing initiatives to promote housing construction within these areas.

Photo of Kathryn ReillyKathryn Reilly (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

On the performance of the labour market, I am aware that much of the draft national reform programme deals with the youth guarantee. One issue of concern in regard to the youth guarantee implementation plan is set out on page 20 in terms of the penalty process. It states work experience, training and education opportunities will under the youth guarantee be prioritised for young people and that other cohorts will be displaced in accessing these opportunities. It goes to state what young people will be expected to do. I am concerned about the issue of displacement and would like to know whether it could feature as a cause for concern in the country specific recommendations, especially at a time when we are trying to tackle unemployment, in particular long-term unemployment.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

Did the Senator say she was referring to page 20 of the document?

Photo of Kathryn ReillyKathryn Reilly (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Yes, page 20 of the youth guarantee implementation plan, not the draft national reform programme.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

I was unable to find it.

Photo of Kathryn ReillyKathryn Reilly (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

During a conference in Dublin a question was raised as to whether there could be an equality case arising from the issue of displacement. Additional places are being made available for young people, but the youth guarantee implementation plan specifically states there could be displacement. Perhaps the Minister of State might refer to that issue.

Photo of Michael ComiskeyMichael Comiskey (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister of State. As my party's spokesperson on agriculture in the Seanad, I am delighted to be here.

I support the call made by my colleague, Deputy Joe O'Reilly, that we look at targets set for the regions. I come from north Leitrim. The larger regions towards the east coast are doing quite well, whereas counties such as Cavan, Leitrim and Donegal may not be doing as well. Perhaps the setting of targets for these areas would prove beneficial.

In the agri-sector, we have just seen €12.5 billion agreed over the next term. That funding will go into all of the agri-sector, which, in turn, will development more jobs. I believe approximately 26,000 of the 60,000 jobs that have been created over the past number of months are in the agri-sector, I suppose, to do with the production of food, etc., which is positive. We must keep investing in that. On part of the Pillar II programme, the Minister for the Environment, Community and Local Government, Deputy Hogan, was with us in Leitrim on Friday last visiting projects that had been funded by Leitrim Development Company up to a total of €3 million. Some of those projects are ongoing and others have been finished and were officially opened. This is positive. That is the way. We have to keep going. We will see more funding going into that area.

Wind energy is controversial in some parts of the country. Certainly, along the west coast, in counties such as Leitrim, I see considerable potential to develop more wind farms because we do not have that problem of them being close to dwellings. Donegal has done quite well over the years and quite a number of wind farms have been built. There are vast areas of mountains in Mayo-north Leitrim where one could build wind farms away from where people live. This would be a significant benefit to the area, not only when they are up and producing energy but in the construction phase where we would see much work for quarries delivering on road-making, etc., when a wind farm is being developed.

I was talking to somebody at the weekend who has ten to 12 employed almost on a full-time basis who would be earning €450 to €500 a week and whose tax and deductions would be paid. He finds himself in a difficult position where he owes €15,000 in PRSI. The Minister for Social Protection, Deputy Burton, is looking at all of those areas. We should look more at helping such smaller companies to assist them to keep on their employees. I note there is considerable pressure. An overdraft will have to be got to pay this and it is difficult enough to find the wages every week for his employees. There should be a little more done for those who would have that sort of a problem.

3:20 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

There are two more speakers. The first is Deputy Eric Byrne.

Photo of Eric ByrneEric Byrne (Dublin South Central, Labour)
Link to this: Individually | In context | Oireachtas source

I will be brief. I welcome the Minister of State.

It is an ambitious programme. As he will be aware, some of the cynics out there would say that they would prefer if the IMF-EU were still here monitoring us and regaining our independence to them is a doubtful achievement. There is a challenging time ahead to prove the cynics wrong, and that we can commit ourselves to a development plan that will see Ireland continue to march in a forward direction in the absence of the eye of the troika.

When we got rid of the troika, there were comments from it to the effect that we fail in two fields. The Minister of State should correct me if I am wrong. One of them would be legal services and the other might have been the cost of the delivery of health services. I note we are going to reform the legal services area. I presume it comes under the heading of modernising public administration.

I have a direct question to the Minister of State. It has amazed me for years - most are probably afraid to attack the legal profession and the Minister is probably the strongest of all - that there is a system called the taxing master's regime. It horrified me once to see that a former Attorney General had been before the taxing master who arbitrated that in excess of €0.5 million was being claimed by this legal professional and the taxing master found it was exorbitant. That is just one example. The legal profession must constitute to some degree illegal claims on taxpayers' money to the extent that they present the State with significant bills that are overturned by the taxing master. I would hope that the criticism levied at us by the troika will be corrected, particularly in the field of this seemingly arbitrary ability of the legal profession to lay a claim before the State for exorbitant sums to which they are not entitled, in other words, daylight robbery. The other group the troika was criticising was the medical profession. In the past we heard it stated, I think, by the German ambassador to Ireland, what a funny country it is where Irish doctors are paid more than their German counterparts. It is true that it is extremely costly for an ordinary person to avail of medical services, at €50 or €60 a visit, in particular, when one must attend a consultant who will charge. Will this philosophy, this capitalist norm of what the market can bear or what the consumer can bear, be reformed in the national reform programme? It is not satisfactory that, for example, either the legal profession or the medical profession can seem to charge just what the market or the consumer can bear. We must restrict that outrageous ability of these professionals to carry out such charging mechanisms.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Minister of State for coming before us. I am sorry that I had to duck out for parliamentary questions during his speech but I read what I could of it in the meantime.
I concur with my colleague in the pointers he raised on costs here. For instance, over the past number of years a great deal of criticism has been levelled at the German Chancellor as living in an unreal world and dispensing hardship on the rest of us when, in fact, the GDPper capitain Germany is lower than it is in this country. Not all the criticism we level from time to time is as soundly based as it should be.
It is an important time. Post the bailout, it is most important we recognise that we must fly on our own, but with due deference to the guidelines already laid down, the targets already set and agreed to, and the extent to which we are prepared to do that on our own. Bonar Law famously stated that Ireland was ungovernable and incapable of governing itself, and we will see that now because it is easy to opt out when it appears that the burden has lightened. In fact, the burden has not lighted at all. The struggle continues. We must keep our eyes on those targets and try to live up to them and achieve them because every time that we deviate from the targets it will be reflected in interest rates applicable to the moneys that we borrow. That is the way it works. It is as simple as that.
I do not want to fall out with my colleague on nuclear energy, but I am not the country's greatest supporter of it for obvious reasons. I do not wish to go into them today but will say simply that alternative energy is necessary. We have access to alternative energy. Wind energy is a useful and worthwhile option. No doubt the capital costs are high but the running costs are way below what would apply to anything else. One ought not forget there is a suggestion nowadays to the effect that nuclear energy is free of emissions. It might be free of emissions but it is not free of residue, which has to be catered for and which has not been so far catered for in any way other than that it will be kept forever in sealed containers at the bottom of the ocean, and we do not know whatever will happen. The example I would emphasise in relation to nuclear energy is Japan, a highly developed society. When it came there, the catastrophe came the same as it did in Chernobyl. Albeit from a different route, the consequences were the same. We need to be cognisant of that.
On wind energy, pylons and wind farms generally, I agree entirely that they should not be located in sensitive locations close to houses. It is not necessary. There is plenty of wind blowing in areas where they will not interfere with residential development, etc.

The Taoiseach and Tánaiste recently visited an installation in my constituency, to wit, Intel. Interestingly, 10,000 people are employed there at present, between those who are directly employed in the installation and those in the construction sector. If one looked out the window from where the presentation was being made, one could see cables and pylons all over the place. That is how the energy got there, as there was no other way to do it. One can talk as romantically as one wishes and it would be much nicer to have everything underground - I realise one cannot put wind turbines underground - but to achieve such a level of development, one must provide water, electricity, information technology and infrastructure at the levels that are required in modern business. In the review that now is taking place, everything that can be done in Ireland must be done.

The submission from the Committee of the Regions earlier was well timed because it served to focus on those parts of the country that have not had access to worthwhile major development in recent years. There is a dual benefit in that if all areas are developed in unison, it lifts the pressure from the rest of the country to an extent. One should remember that while it is not always necessary to have a major airport, port or road within 50 m of a particular development or investment, it helps, and such infrastructure is needed. The Shannon development region was a classic issue long ago, whereby a particular focus was placed on that region that allowed it to develop in a way it would not have developed otherwise. I ask that this particular type of model be borne in mind in the context of any regional development taking place at present.

In respect of agriculture, Ireland is the fourth largest beef-exporting country in the world. While it is a fundamental part of the economy, I recall that during the boom times of the Celtic tiger, the entire agrifood sector was scoffed at as being old-fashioned and not something in which it was in any way trendy to be involved. However, when the chips were down, we were obliged to rely on agriculture, as well as the information technology, pharmaceuticals and chemicals sectors, and one should never forget that. Consequently, we should not allow ourselves to be hustled away into believing that we can downgrade and shrink a particular sector to accommodate the rest of the global economy. One must remember that, as the Chairman is aware, many of those countries are in a far better position than Ireland, with much greater national resources and many more options in respect of energy in particular. To do what is suggested in some quarters is the equivalent of an economic weapon being used unnecessarily against a smaller country. This point is made in respect of agriculture in general.

As for climate change, I believe that drainage is a major issue that must be attended to in Ireland in both urban and rural areas. Moreover, this must be done on a systematic basis that requires the full approval of the European institutions, which must recognise this sooner rather than later. I do not believe it is possible to do it under the use of regional or structural funds or whatever the case may be, as it is too big a job. I believe only two major rivers have been drained in this country over the past 60 years, namely, the Boyne and the Moy. In respect of both, all the interests, including the recreational interests, protested at the time. They said the rivers would never be the same again, but they were wrong. The rivers improved as a result of the drainage and there was a huge impact on flooding in the affected areas. When I see pictures such as those appearing on television in recent days that showed vast areas of the country under water, I consider that to be totally unnecessary. It has nothing to do with global warming or climate change but simply pertains to ensuring that watercourses are cleaned, scoured and de-silted on a regular basis to ensure the water can flow. As for the notion promulgated in recent years that there is no need for drainage and this is part of creating a national flood plain, are we out of our minds? To think along those lines in a country of this size is utterly ridiculous. As a matter of urgency, we must focus on the need to carry out drainage on both a regional and a national basis and to have it co-ordinated in such a way as to be of major benefit to the economy.

My final point pertains to working capital and the credit requirements to which I meant to refer earlier. Credit, in the form of working capital, now is recognised among the small and medium-sized enterprises as being a major issue. I do not know how it took so long for everyone to realise this because, like all other members present, I have been working with this fact over my head for the past five years. It has been right in front of our noses. These matters do not simply pop up overnight, and this is a huge issue at present because credit in the form of working capital is required to stay in business. The lending institutions that are in place are in a position to provide that working capital, but if they do not do so - that is, if they think it is possible to shrink on an annual basis - then the market and the entire economy will shrink as well. As it does not work that way, I ask for particular special emphasis in this regard. There are other issues to which I do not wish to refer at present. I apologise for speaking for so long, but these are all crucial issues that must be dealt with and recognised at European level, not simply in passing but in their entirety.

3:30 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

The Minister of State certainly got members going today. I will add one further point by asking the Minister of State to outline to members what discussions he has had with other stakeholders and what were their views in respect of the draft programme.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Chairman and all members for their contributions today. I will kick off with an overview of the points made to me. If one considers the range of issues that have arisen, which include everything from the post-leaving certificate courses to nuclear energy, with a bit of Bonar Law in the middle, the breadth of those issues is absolutely huge. I do not mean that in a flippant manner; if one considers the material in the draft national reform programme that was placed before the joint committee, the reason such a breadth of questions was raised is the breadth of policy areas that have been included in the aforementioned plan. I make this point to emphasise what an important development this is for Ireland from a governance point of view. This is Ireland's first time participating fully in the semester programme and, although I suspect members already are aware of this point through their work within the Oireachtas and their constituencies, hopefully this will bring home to people the breadth of areas that are involved in trying to get the country back to where everyone desires it to be and the breadth of areas that therefore are involved in the semester process. The manner in which I would position this process for members is by noting that it covers a great number of areas and items of work one would wish to do anyway and which would be of benefit to the country and the people in any event. The semester process ensures that the Government provides the continued focus that is needed here, but it also facilitates other countries in doing the same. One of the bitter lessons learned from the recent crisis is that difficulties and problems in other countries can cause the unravelling of one's own efforts. This is the rationale behind the semester process and amidst all the questions of detail that I will do my best to address in a few minutes, one should not lose sight of this bigger picture and of the reason for this process being in place.

I propose to go through each of the points of detail that have been put to me and will do my best to address each in turn. The Chairman kicked off with two questions, the first of which pertained to the employment targets and benchmarking them towards the full employment objective. The Government's objective is to restore the economy to full employment by 2020. Benchmarks that are laid down within this programme and the targets that are laid down from an employment point of view will be vital prerequisites for the economy getting to that point by 2020. If one considers the figures supplied, for example, the target is to raise the employment rate for women and men between the ages of 20 to 64 to between 69% and 71%. In 2008, I note the equivalent rate was 71%. Consequently, while this is a really demanding objective to reach, the Government believes it will do so. Moreover, as that point is reached, it will ensure that the economy can get to a point at which it can help to deliver the full employment objectives the Government wishes to achieve across that time.

As for the question the Chairman put to me regarding balanced regional development, in a point that also was raised by Deputies O'Reilly and Kyne, as well as Senator Comiskey, the Government is very much aware of the regional dimension in delivering this programme.

We will do our best to take account of the input of the Committee of the Regions. I am aware of the views it has articulated to the committee in response to which I would make three points. The first is that it will very much be the job of the line Minister with responsibility for the sectoral area concerned to ensure the regional objective is delivered. Second - this aspect was raised by Deputy Joe O'Reilly - it will very much be the role of bodies such as Enterprise Ireland and IDA Ireland to ensure a regional dimension in our national objectives. Third, there is an important political dimension to all of this; as clustering in our cities and urban areas continues to accelerate - Deputy Seán Kyne made reference to the fact that 50% of the population would be resident in Leinster in the medium term - we need to examine political configurations and the bodies that will act in a way that is consistent with the overall development of the country. I have recently heard discussion about strengthened regional assemblies and the type of work they could do. That is something we should examine and it is facilitated by the Local Government Reform Act 2014. I am very clear, even though my constituency is an entirely urban one, located in the centre of the capital city, that we cannot deliver on our objectives for everybody in the country unless there is balanced regional development. The roles of Ministers and semi-State bodies in this respect are important, but we must examine how we organise political activity to meet this important objective, a matter about which Deputy Joe O'Reilly also asked me.

The Deputy also raised the issue of apprenticeships in the construction sector which now accounts for the equivalent of 4% to 6% of national output, whereas at the peak of the boom it was equivalent of 20%. Most developed economies of this size would have a construction sector which would account for the equivalent of 10% to 12% of national output. The first thing we can do to address the concerns about apprenticeships identified by the Deputy is develop a reasonable, well regulated and appropriate construction sector for an economy of this size. I take on board the point made by the Deputy. I am aware of cases in my constituency where young men and women cannot fulfil their apprenticeships. What I would like to see happen is local authorities - the gateway programme in this area has been identified by the Minister, Deputy Phil Hogan - continuing to do what they can to allow people to complete their apprenticeship programmes and, as the construction sector recovers, enable them to participate in its development.

The Deputy also mentioned the cost of wind energy. This issue is covered on page 31 of the national reform programme. To date, wind energy production has been the largest driver of growth in the area of renewable energy. The national reform plan contains considerable material detailing how we can seek to develop its contribution further. It recognises that further development is needed if Ireland is to meet its objective of 40% of energy consumption being met from renewable energy sources. It contains some important strategies for how we can achieve this objective.

Regarding nuclear energy, while the semester programme includes many things, it does not include a reference to nuclear power. I will leave that issue to the relevant Minister and Oireachtas committee. There are many other strategies and plans, in respect of which we have the infrastructure in place, that will enable us to deliver on our objectives in meeting the energy targets set.

I agree with Deputy Joe O'Reilly in his point on the preschool year. I am aware of the commitment made by the Government which the Tánaiste and the Minister, Deputy Frances Fitzgerald, announced recently, whereby in a number of areas across the country it is seeking to deepen the current early intervention measure. There is no doubt that the preschool year and even interventions made prior to it can change the life chances of individuals. I have seen this happen and want to see more of it.

On Deputy Michael Colreavy's point on including detailed plans within the national reform programme, the problem is that if we were to include detailed plans within it, we would end up with a programme which would run to thousands of pages. In terms of what it does - I believe this assertion will be borne out if people read through it - it makes reference to detailed plans being in place in different areas. To return to the point on energy, if members look at the work being done on the carbon free roadmap and the reference to plans to improve the energy efficiency of housing stock and public sector buildings, there are many references to detailed plans that are already either in place or to when they will be made available and delivered on by the Government.

On the point made by the Deputy on the dangers of increasing inter-country collaboration, we cannot have our cake and eat it because we have many energy targets and meeting them will require collaboration with other countries. As we collaborate with other countries, we will end up with ways of working to deliver on targets that they need to meet and get from them things that we need. Owing to events that have taken place within Ukraine, my colleagues in other countries are very clear that the game has now changed and that the issues of energy independence and energy security are of inordinate importance. I saw this at the March European Council when a discussion on climate change, emissions and other vital issues that had been planned for a very long time took on a completely different context owing to the events that had taken place, the concerns about energy independence and the need to ensure energy security. That is the context within which we will have to evaluate our plans.

On the point made by the Deputy on the tensions between food production and climate change, if we consider the commitments we have made to ourselves as a country and the global issue of food security, a matter on which Deputy Bernard J. Durkan touched, having regard to the extraordinary statistic that we are the fourth largest exporter of beef in the world - I am surprised we do not hear this mentioned more - we realise we face a challenge that we will need to manage. This is a point the Government has been making forcefully. The Taoiseach has raised the issue at the European Council and I have raised it at the General Affairs Council. I know that the Minister, Deputy Phil Hogan, has also raised it. We have made the point that in terms of how in the context of climate change emissions and costs are calculated, reference needs to be made to the fact that land use is very important. There are consequences attached to land use. We need to have this recognised. I emphasise the determination of the Government to deliver on the objectives set in terms of climate change and our emissions and I am confident we will be able to deliver on them. The plans are in place to do so and further plans will be elaborated on. The legislation the Minister, Deputy Phil Hogan, will be bringing to the relevant committee on climate change and on how we will track our emissions is an indication of our commitment and our confidence that we will deliver in meeting these challenging targets.

I hope I have addressed the issue raised by Deputy Séan Kyne regarding the construction sector. On the single market for energy, I refer to my earlier comments about the importance of energy independence. We will see a renewed focus on the delivery of the infrastructure required to ensure energy security. We need to be mindful of the changing landscape as we make our own policies because it will be a factor when companies, including Irish companies, decide where they should locate their operations.

I completely understand the point Senator Kathryn Reilly made on displacement under the youth guarantee. One can apply the displacement argument to any intervention by the social welfare system in the operation of labour markets, but any intervention in the social welfare system or fiscal policy aimed at increasing employment or dealing with challenges in the labour market will have consequences elsewhere. We need to track these consequences and be aware of them. Even as we become aware of the nature of these displacement effects, I am certain that policies under the heading of the youth guarantee such as JobsPlus will still demonstrate their effectiveness. I am sure the Senator will agree, however, that the potential for displacement in the economy is not a rationale to do nothing.

Senator Michael Comiskey spoke about the targets for the regions and wind energy. He also raised the issue of low wage jobs and the tax challenges in that regard. The Minister for Finance has pointed out that, notwithstanding the huge pressures we continue to face, when times were extraordinarily bad, we still managed to make changes to the tax system to target and incentivise job creation through, for example, changes to VAT rates and taxation of farmland as it moved through families. We need to do the same in respect of the tax challenges that arise from low wage jobs. As members will be aware, many are finding that if they work an additional hour of overtime, they will lose half of what they are paid through income tax and the universal social charge.

I entirely agree with Deputy Eric Byrne and look forward to proving the cynics wrong. I am certain that the Government and the people will demonstrate an ability to govern themselves in a still challenging external environment. The people who were most critical of the troika's presence now appear to bemoan its absence. As a liberal democracy now celebrating the centenary of many of the events that led to its foundation as a state, it is not politically or economically feasible to expect to participate in an external aid programme for one second longer than is necessary. The moment the Government judged it possible to exit the programme, we did so and our objective now is to ensure the economic sovereignty we have regained benefits the people. The Deputy outlined concrete examples of how that needed to be achieved.

In regard to the legal services Bill and the cost of legal services, the national reform programme refers to the establishment of an office of a legal costs adjudicator which will assume the role of the Taxing Master, modernise the way disputed legal costs are adjudicated, issue guidelines and publish determinations. The Deputy also spoke about the costs imposed on families and the economy by unreasonable and unsustainable legal costs.

In regard to the Deputy's comments on the cost of the medical card system and consultants, I am sure he is aware of the information recently released into the public domain which showed the degree to which consultants' wages had been cut in line with wage cuts elsewhere in the public service. That has been put in place, but we must balance it with the fact that we need a large number of consultants and a consultant-led health service to deliver the best health outcomes for the people we represent. The consultants who possess the level of expertise we require will be aware of the rewards and opportunities on offer in other countries. I note, however, that the salaries available to them have changed in line with the sacrifices other members of the public services have made.

3:50 pm

Photo of Eric ByrneEric Byrne (Dublin South Central, Labour)
Link to this: Individually | In context | Oireachtas source

Perhaps I should have made my comparison with those who operate in the private sector. Not only does VHI pay them huge fees but they also also receive top-up payments. There is no control over what they may demand from a patient.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yesterday the director general of the HSE, Mr. Tony O'Brien, commented on issues pertaining to consultant costs and monitoring. His comments and those of the Minister for Health suggest issues have arisen in this regard and that we have to move to address them. I am aware from my time on the Committee of Public Accounts that it is a complicated issue, but it is receiving the attention it deserves.
I agree with Deputy Seán Kyne that people should read this document if they are interested in public policy. The programme deals with the issue of medicinal products which have a major impact on medical costs, stating:

Solid progress is being made with regard to increasing the share of generic drug usage. Ireland is aiming for a target of 70% generic penetration of the off-patent market by volume by 2016. In Q4 2013 generics accounted for over 58% of the total off-patent market by volume.
One might argue such measures should already be in place - I would say the same - but that figure of 58% is an indication of the progress made in terms of the legislation on referencing drug prices between branded and non-branded products. The programme also sets out other steps that will be taken.
I could not agree more with Deputy Bernard J. Durkan's comment on the need to fly on our own. I have addressed the issues he raised on nuclear energy and energy infrastructure. I have heard him speak on the subject of credit and working capital at our parliamentary party meetings and in the Dáil. The programme describes in some detail the steps that have been taken to provide for non-bank lending while the banking system recovers to the point where it can meet the credit needs he identified. Four funds have been set up out of the private sector to deal with supply to and investment in companies.

For example, the microcredit fund has been set up and is beginning to do some good work with really small companies. Even in the best of times, such companies might have struggled to obtain bank credit, but they certainly are struggling now. This is the reason the Government has been working with the German Government to identify measures such as the German KfW bank playing a role in providing credit for Irish small to medium-sized enterprises, SMEs, because I have no doubt that until the difficulty of the supply and cost of credit is dealt with, the economic recovery we all seek will face too great a barrier. While progress has been made in these areas, from the feedback they receive from businesses in their constituencies, all members are aware that there still is a lot of work that must be done in this regard. However, it is because of its importance that it is included in the national reform programme and it will be pivotal in the Taoiseach's engagement at the European Council.

I have done my best to respond to a breadth of questions and will conclude at the point at which I began. I really appreciate the effort and all of the questions colleagues have put. It should be an area in which there will be future Oireachtas engagement and I will certainly play my part in making sure this happens with the committee. I thank the Chairman.

4:00 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

I thank the Minister of State and his officials for their attendance and the interesting presentation and discussion. While members of other committees attended, the meeting clashed with the meetings of the Joint Committee on Jobs, Enterprise and Innovation and the Joint Committee on the Environment, Culture and the Gaeltacht. I hope that in future years there will be more attendees from these committees. I again thank the Minister of State for his attendance. The joint committee will now go into private session as it has a number of items it must discuss.

The joint committee went into private session at 4.15 p.m. and adjourned at 4.20 p.m. until 2 p.m. on Thursday, 10 April 2014.