Leo Varadkar (Dublin West, Fine Gael)

I wish to share my time with Deputies Deirdre Clune, Simon Coveney, Tom Hayes and Jimmy Deenihan, with the agreement of the House.

I move:

"—That Dáil Éireann:

notes that the number of people seeking training programmes will rise rapidly as a consequence of:

the numbers on the live register increasing by nearly 50% over the past twelve months; and

the projected 8% unemployment rate for 2009;

notes that the standardised unemployment rate is at a nine year high with unemployment in Ireland now higher than in the United States, Britain, Japan, the Netherlands, Denmark, Norway, the Czech Republic, Switzerland, Poland, Singapore and South Korea, among others; and

calls on Government to:

restructure publicly funded training programmes to make training provision more responsive to a rapidly changing labour market and economy;

conduct a comprehensive expenditure audit of FÁS to ensure that the taxpayer's substantial investment is getting best value for money;

consider the needs of small and medium sized businesses when developing and promoting training services; and

change the eligibility criteria for the back to education allowance to open up access to further education for the unemployed."

The 30th Dáil is only 16 months old at this stage, yet I note this is the third debate we have had on employment already. In many ways it is a reflection of the gravity of the situation in which we find ourselves and the growing realisation that rising unemployment is the human cost of economic mismanagement.

In the first debate we had on unemployment, about 12 months ago, Deputy Micheál Martin, the then Minister for Enterprise, Trade and Employment, told the House the best benchmark of how a country is doing is its capacity to generate new sustainable jobs and advance the standard of living of its citizens. Ultimately that is what good macro-economic and sound enterprise policies deliver. I agree entirely with Deputy Martin in that regard. Let us therefore apply the Martin tests to the current Government. The first test is to ask whether macro-economic policy has been sound. The answer is certainly that it has not been sound. Public spending has increased by 80% in the past five years, financed by windfall taxes on an unsustainable debt-fuelled property boom. Now it is being financed through borrowings of at least €11 billion this year and perhaps €15 billion or more next year, a deficit that is rapidly getting out of control. The likelihood is that the national debt will probably double by the middle of 2010. By the end of 2011 national debt as a proportion of GDP is likely to be higher than it was when this Administration came to office in 1997. Also, there has been a series of enterprise policies. We talked a good deal about the "dirty dozen" and the "terrible 32". I have my own favourite, the "terrible ten", namely the ten policies the Government introduced which are both anti-enterprise and anti-employment.

The first of these is the national wage agreement which, in itself, is driving up the cost of employment — and risks driving people out of their jobs. The decision to cut apprenticeships was a major mistake. This is one of the few areas in which FÁS does a good job and yet, for some reason, the Minister has decided to cut apprenticeships. There was the failure to make any effort to reform FÁS and the initial denial over several months that anything was wrong with that organisation. Then there were the cutbacks in infrastructural spending, particularly as regards road building, rail building and broadband. I cannot understand the decision in the budget in particular to cut back spending on broadband by 25%, since technology is the growth area of the future.

Then there is the rising cost of doing business, where the Government has literally stood by and allowed utility prices, local government rates and levies to increase. There is the growing administrative burden on companies, which again, has been increased by the budget. The car parking tax will have to be administered inter alia at greater cost to Government. The decision to increase VAT, again, will damage jobs.

I cannot understand the cutback in jobseekers benefit at a time when people are losing their jobs. People who have been working for a year or certainly, nine months, are now being punished for the fact that they have lost their jobs through the cutbacks in jobseekers benefit. A decision to increase capital gains tax will cost jobs as will the failure, in particular, to recapitalise the banks. I have come from a meeting with some sub-contractors from County Meath, whom I met with Deputy Shane McEntee, and the extent of the pressure that small companies are under is really shocking. So many companies are in contact with us all the time who had their overdraft facilities halved by the banks and are now facing the prospect of having to lay off people and go out of business because of the Government's failure to follow up on the guarantee Fine Gael supported, with a strategy to recapitalise the banks.

The result of all these failed macro-economic and anti-enterprise policies is rising unemployment. Rising unemployment is the human consequence of economic mismanagement by this Government. The live register figures will be released tomorrow. I do not know what they contain, perhaps the Minister does. However, I anticipate that the live register will be more than 250,000 for the first time in 11 years. I expect that, within a month or two, if not tomorrow, the numbers signing on will be higher than they were when Fine Gael left office in 1997. I appreciate that is not the case yet, in terms of percentages, but we are getting there fast.

In terms of percentages, we are talking about a standardised unemployment rate of 6.6% at the moment. The ESRI and FÁS say it will be more than 8% this year. Bear in mind that the EU average unemployment rate is 7% and it means we are accepting that Ireland is again going to be a high unemployment country.

Let us look at where we are in relation to other countries: Netherlands, Denmark, Finland, Poland, Sweden, Britain, Norway, Japan, the United States, Austria, the Czech Republic, Malta, Israel, Singapore, to name a few, are countries with lower unemployment than Ireland's. It is probable we shall overtake Italy, Germany and Portugal in the coming months. The Government will, no doubt, argue that this is all down to international factors — and international factors have a part to play in this. However, all countries are feeling the cold wind of occurrences in the international markets, yet they are not all suffering as Ireland is. Unemployment in Germany, for instance, is at a 16-year low, and as I mentioned, Ireland will overtake it within the next few months. The reality is that all the countries I referred to are part of the world we live in, and not on a different planet. It occurs to me more and more that those on a different planet are the Members opposite and the Ministers who do not acknowledge the extent to which the situation in Ireland is so much worse than among our partners and competitors. This has allowed them to get off the hook and not take action.

At present Ireland is losing 720 jobs a week. That effectively works out — including Saturday, Sunday and night-time employment — that we are losing a job every ten minutes. That is an extraordinary situation to be in compared to what it was like when this Administration came to power, when a job was being created every seven minutes. The Small Firms Association said today that these figures should be a wake-up call for the Government, which is clearly asleep. There has been comment about the absence of the Tánaiste in the United States. I do not oppose the fact that she has gone to the United States and believe it is appropriate that the Minister for Enterprise, Trade and Employment should travel overseas. However, there are 52 weeks in the year and the Dáil sits for just over 30 of them. There are 20 weeks during which trade missions could be done. The former Taoiseach, Deputy Bertie Ahern, made a point of doing these in January and I believe that is when they should be done. Perhaps, better than going to the United States in election week — when the focus is very much on what is happening in America — the Minister might have done better, not necessarily to come in here and listen to me, but just to do her job and try to restore Ireland's competitiveness.

When Fine Gael left office, Ireland was the fourth most competitive country in the world. It was the place people wanted to come to, to invest and do business. Under this Government we have fallen into 22nd place and that has not improved at all during the period in which Deputy Martin was Minister, or during the time Deputy Mary Coughlan has been Minister. We are getting to a stage where almost half the multinational companies that had invested in Ireland are saying they would not do so again, if they were in a position to make such a decision. Rather than going to the United States during a Dáil session, perhaps the Minister should take action and start to make Ireland competitive again because it is only through trade that we will get out of this recession. We cannot borrow, tax or cut our way out of it, so we must trade our way out, and that means addressing the issue of competitiveness.

It seems to me the Government has thrown in the towel on employment, in the same way that it has on the economy and public services. Everything is somebody else's fault and the Government is powerless to act, on all occasions. However, there is a better way. There is still hope for Ireland. I am not despondent about the future in the way that many are. We can still have a balanced budget, full employment and high quality public services. That can only be done, however, if the right policies are put in place — and they must be put in place now.

The first action to be taken is to address the budgetary crisis. We need to end the pretence that the budget currently going through the House addresses the economic crisis in any serious way. Essentially, it is a hit and hope budget — tax a bit, cut a bit and borrow a bit more and hope something turns up. That will not work. We need to bring the deficit under control. This means abandoning Deputy Brian Lenihan's budget and adopting the alternative proposals set out by the Fine Gael party, which will bring us to a situation whereby borrowing will start to fall back.

The next most important action to be taken is to invest in education and training and some speakers will discuss that later. One of the key areas where we must invest in training is in construction. We are about to move from a situation where 20% of our economy was construction based to one where only 8% is. This means that more than half of the people who were involved in construction jobs will never be involved in construction jobs again. They need to be retrained for new jobs. We need to identify where those new jobs will be, in IT, the food industry, biotechnology and green collar jobs, alternative energy in particular. A strategy to deal with this should have been in place a long time ago, but if it is not, let us get it in place now.

We need to overhaul FÁS, an organisation that spends €1 billion a year but which does not produce the return we should expect. We must also consider a public works programme, as was done in the past. We have significant numbers of skilled people who are unemployed for the first time who could be used in a public works programme, perhaps run by the OPW, to build schools and develop our infrastructure at a cost at which these projects could not be delivered earlier. We need to consider expanding programmes, such as community employment, CE, in areas of disadvantage. I am not a fan of the community employment schemes as an active labour market measure, but I accept they have an important social role. In areas of disadvantage where high unemployment leads to higher crime levels and further deprivation, we must consider expanding CE for several years, until the worst of the recession is over.

We must also address the issue of people under 25 being on the dole. Nobody under 25 should be on the dole. Perhaps it is all right for people under 25 to be on it for two or three months when between jobs, but not after that. We must create a situation where people under 25 who are not in work are given a guarantee that they will have a position in training or education, but they must also be told that it is not acceptable for them to continue to be on the dole and refuse jobs or the opportunity of training or education. We should have a contract with the approximate 40,000 unemployed under 25 year olds that will ensure they have employment, a work scheme, training or education.

The most important action we can take is to begin the process of restoring competitiveness and to expand the supports for business. There has been no success in this regard during the past six years under the Government. We can do this in several ways. We can freeze Government charges, starting with rates and development levies. We could begin with this from tomorrow. If this year's increases were to be the last ones or if the Government was to guarantee they would not be increased for the next two years, this would give businesses confidence that they would not face an extra 10% or 15% increases over the next few years. We could also do something about utility costs, electricity, water, gas and telecommunications. Another speaker will deal with this in more detail.

We could also invest in infrastructure. We could reverse the cuts in investment in broadband, roads and rail by freeing up the pension reserve fund on a PPP basis, as proposed in the Fine Gael alternative budget. We could also cut back on red tape, as other countries have done. We have a commitment from Government that it will cut back on red tape by 25% by 2012, but have not been provided with any figures with regard to how much it will be cut back by the end of this year or next. It seems we are supposed to wait until 2012 for something to happen in this regard.

We could also reverse the VAT hikes, which were a big mistake and the cost of which will fall on retailers and result in higher unemployment. We could do as ISME suggested and suspend the pay deal. We accept that people earning under €50,000 will need a cost of living increase, but in a time of recession we cannot justify borrowing €1 billion to increase public sector pay. The effect of this would be to increase labour costs for businesses by 6% or 7%, which would only result in further employment. There is nothing to be achieved by a pay deal that causes people to lose jobs.

We also need to recapitalise the banks. The guarantee has brought us this far, but only this far. Ordinary people and businesses large and small have seen their overdrafts cut and they cannot get credit. Credit, as the Minister for Finance said, is the lifeblood of the economy. Deputy Richard Bruton said credit is the oil on the cogs of the wheels of finance. We cannot waste any further time with regard to making the decision to capitalise the banks. While it will be an unpopular and difficult decision, the Government can be assured it will have the support of the Fine Gael Party if it is done appropriately, we get a guarantee of an equity stake in the banks, and they guarantee they will restore credit to business.

We should also consolidate labour law. Currently, we have 17 different labour law Acts. This is too many and results in confusion, creating difficulties for small businesses in particular. An area to which the Government must give attention is the issue of the joint labour committees, JLCs. This is a complex issue, but I know the Minister of State understands it well. We cannot sit back for much longer in a situation where businesses are closing on Sundays because of the requirement for double pay. We are all for labour rights, but labour rights that cause people to lose jobs must be reviewed. I hope the Government does not wait for the courts to solve the problem and that the Minister of State, Deputy Kelleher, will be proactive in dealing with the situation.

Ireland is sliding into an economic abyss, the economy is shrinking, public finances are starting to make Ireland look more like a developing country than a developed one and unemployment is set to soar. This cannot be denied, but all is not lost. There is still hope for Ireland. With real leadership and the right policies, the best is yet to come for the country. The Fine Gael Party will not be content merely to prosecute the Government for its failures, but will also point the way forward to recovery and reform. That is what this motion does and I commend it to the House.

See this speech in context