Eamon Gilmore (Dún Laoghaire, Labour)

I thank all Members who contributed to the debate on this Labour Party motion, and I compliment my colleague, Deputy Willie Penrose, for tabling the motion.

We have been talking here over the last couple of weeks about serious problems in the economy, and more recently the banking crisis. However, there is a jobs crisis in this country that has been going on for months and no significant action by Government has been taken to deal with it. If anyone wants to see the extent to which the Government is in denial about the scale of the unemployment problem facing the country, all he or she has to do is read the pathetic amendment to the Labour Party motion tabled by the Tánaiste and listen to her pathetic contribution yesterday and that of the Minister for Social and Family Affairs and the Minister of State, Deputy Billy Kelleher, this evening. None of them could put forward a single significant new idea or initiative to deal with the unemployment crisis. As far as the Government is concerned, it is business as usual. To add insult to injury, for the 80,000 who have lost their jobs in the past year, the Tánaiste is asking the Dáil in her amendment to "commend the Government" for its stewardship of the economy and the employment market to date.

The statistics are shocking. The live register has increased by nearly 80,000 over the past 12 months, an increase of almost 50%. The live register unemployment rate has jumped from 4.6% to 6.3% in less than 12 months. The ESRI's commentary on the labour market is revealing. The deterioration in the early part of this year was particularly remarkable and the ESRI is now predicting that employment will be 3% lower in 2009 than in 2007. Unemployment is expected to rise to 8% in 2009 and evidence is starting to come through of the labour force falling as participation falls. The problem is widespread across the country. A brief glance down the numbers of those signing on in each local office is deeply worrying — an extra 4,000 in Donegal, 4,300 in Galway, 3,000 in Waterford, and this is just a random sample.

This is a cause of real hardship and distress for people, those who have mortgages, loans and all types of other commitments who are facing really hard times and choices. If a job is lost, will a child have to be taken out of playschool to save the money? Does one or other partner have to leave and look for work abroad? What happens the house? It cannot be sold, and even if it could, who would pay the negative equity?

The Government is preparing a hairshirt budget, but is ignoring the underlying cause of the problem, which is the real economy. The cause of the problem in the public finances is the recession in the real economy, not the other way around. Getting people back to work will bring in tax revenues and save on social welfare payments. Just look at that great work or fiction, the 2008 budget: a single person on €35,000, not far off the average industrial wage, pays €303 in PRSI, €700 in levies and €1,510 in tax, if he or she is working. If he or she loses a job the State has to pay about €10,500 in job seeker's allowance, before any other form of housing assistance or benefit. The net gain to the State of every job created at that wage level is at least €13,500 or, looking at it the other way around, the total cost to the Exchequer of the 80,000 jobs lost in the past year is approximately €1 billion. Creating a job at €45,000 results in a saving of more than €20,000 for a single person and that does not include savings for qualified adults, housing related payments or VAT on money spent from wages.

The lesson is simple. A strategy is needed to get people back to work and it is clear that the Government has no coherent or determined strategy to deal with the issue. It has spent months focused on the public finances but there is no jobs strategy. It must be a matter of deep disquiet that at the time we most need FÁS to gear up to deal with the crisis, the organisation is mired in internal audit difficulties. This matter is too serious to wait for months while FÁS sorts itself out. A major skills programme is needed now to address the needs of those losing their jobs.

The expert group on future skills needs concluded there is a need to upskill at least 500,000 people over the next decade and now is the time to start. Many of the people losing jobs in construction have limited formal qualifications and they may have highly sector-specific skills. Now is the time to address their needs and those of many others losing their jobs, including professionals, such as engineers, architects and lawyers. A major co-ordinated programme which makes use of all available capacity in training and educational facilities is required. It must bring together agencies and Departments, with strong political leadership. If hard decisions have to be taken, that must be done. The Government can also take targeted initiatives that will have an impact on employment.

The Labour Party has called for some time for the acceleration of the schools building programme that would utilise the skills of people losing their jobs in the construction industry. Sometimes when we raise this, we are asked where we will generate the money required. These projects could save the State money because they could proceed using a different approach to financing. When I was in Cork South-West with my colleague, Senator Michael McCarthy, last Friday, I visited Gaelscoil Chloch na gCoillte in Clonakilty. It is a fine school serving 240 students who are all accommodated in prefab buildings in the school yard. The school administrators have a site and they appointed project engineers in anticipation of approval of their project, but then the money was pulled. The school principal and the board of management understand fully that the money is not available from the Department of Education and Science. However, they have suggested to the Department that if they were allowed to take out a mortgage, they could build the school and the repayments on the mortgage would be less than the rent paid by the Department for the prefabs.

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