Mr. John McCarthy:

I am quite confident about last year's headline figure. There was an issue; the Deputy mentioned the incorporation of the census data. The CSO says that that affected the composition or the sectoral breakdown of employment. It had previously underestimated the number of people in agriculture, so it was adjusting over the year to correct for that. However, the CSO was quite happy to stand over the overall figure. I am not casting doubt on the figures, but the strong employment growth last year relative to the weak GDP figure gave rise to a phenomenon whereby productivity fell by about 2.5% last year. That has only ever happened twice in 50 years, so it was a very unusual phenomenon. This was not so much on a GNP basis; it can be explained based on the patent cliff that Deputy O'Donnell mentioned.

For this year, we have incorporated a downward revision to our employment number. At the time of the stability programme we were projecting 2.25% employment growth; we have brought that back to 1.8%. The reason is that a base effect will kick in in the second half of this year. This is related to the Deputy's earlier point. Because employment growth in the second half of last year was so strong, it is difficult to get year-on-year growth in the second half of this year. Therefore, we have brought down employment growth to 1.8%. A number of pieces of evidence support continued employment growth this year. Ms Weymes mentioned the live register, which is an imperfect measure of the labour market. However, the pace of reduction in the live register actually accelerated over the summer. The number of people on the live register is now falling at 9.5%, compared to about 8% earlier on in the year. The unemployment rate is down to 11.1%, which is absolutely too high, but we are in a better position than we were two or three years ago.

I will not mention the fiscal side, but if one looks at the income tax data to the end of September, it is up by 8.8%, while PRSI is up by over 5%. On balance and in the round, most of the evidence would support reasonable employment growth this year.