Leo Varadkar (Dublin West, Fine Gael)

I welcome this motion and commend Deputies Shortall and Penrose for putting it before the House.

I do not need to advise the House of the extent of the unemployment catastrophe facing us. This month, the standardised unemployment rate is 10.4%. Even though there is an international financial crisis, unemployment in Ireland is the fourth highest in the EU. Few countries outside the EU have such high unemployment levels. Ireland has gone from a country of low unemployment to one of high unemployment. Despite other countries facing recession, not one has leapt from the bottom of the unemployment league table to near the top. Ireland is ahead of France, Germany, Italy and numerous countries we would have perceived to have failed economic policies and systems.

It will certainly get much worse with up to half a million people out of work by Christmas. I fear there may be many more next year. When we arrive at that stage, it will not be possible for the Government to finance itself, pay the social welfare bill or public service salaries, leaving us in a position the State has not faced since the late 1920s or early 1930s.

The Government will bring forward a mini-budget, or potentially a maxi one, in the next several months which will mainly focus on cuts in spending and increases in taxation. Both measures are necessary. It is important tax increases come with the broadening of the tax base and do not fall for the easy options of higher income tax and more taxes on business. There needs to be more to the Government's policy than just a catalogue of spending cuts and tax increases. What we need, and what has been missing, is an economic plan to support business and sustain jobs.

Some of the proposals put forward in the Labour Party's motion are good in that regard. I agree with the proposal for an earn-and-learn scheme for those on three-day weeks participating in training on the other days and the increase in community employment places. While evidence shows the latter is not particularly useful in getting people back into employment, it does perform an important social role. At a time of rising unemployment, and the potential return to long-term unemployment, it is important to get people back into an occupation in some way.

The proposals for career breaks and sabbaticals in the public service would be useful not just in creating jobs, but achieving the cost savings Ministers are seeking. There might be many public servants, particularly those approaching retirement, prepared to go part-time or take a career break and they should be facilitated to do so.

The Government's approach to training has been disappointing. While 51,000 additional FÁS training places have been created, they are not for real. They involve one-week and two-week courses with a few night courses and mainly on-line ones. A whole new approach to training is required. The €1 billion FÁS budget should be liberated into a system of individual training accounts or vouchers that would allow people to chose the training they want. That will be particularly relevant to the new middle-class unemployed, those with degrees and professions, for whom there is no real training option with FÁS. If they were given €4,000 they could attend an institute of technology or university to study for a Master's degree or get the training they want. The Teachers Union of Ireland recently put forward a good document, which I endorse, on how much of FÁS's budget could be directed towards vocational education committees and institutes of technology.

There is also a case for having a public works scheme for those who have lost their jobs in the construction industry. Moneys from the national development plan could be used to create public works schemes for housing and schools, particularly in disadvantaged areas, involving unemployed construction workers and apprentices. This would be done much cheaper than at the market rate. Obviously, however, it would have to be done on a limited scale as it could distort the market.

The national development plan needs to be refocused towards smaller labour intensive projects, such as small roads, schools and primary care centre schemes, coming in under €20 million in costs. The funding cannot be directed at large projects which will go to large companies from other countries. We all understand the capital budget will be cut in the forthcoming budget but there are other ways. Moneys from the National Pensions Reserve Fund could be invested on a commercial basis in, say, a toll road scheme from which it would receive its return. People may hate to pay tolls but if they knew they were going into their pension fund they might feel a bit better.

I am becoming very concerned at the number of people under 25 years on the dole. In the Dublin West constituency, it stands at 2,000 when it was almost nil two years ago. Many of these people are falling into long-term unemployment. For this age group, there should be a flexicurity system whereby they are required to participate in training or employment to receive their benefits. We cannot allow a situation whereby those who went into the construction industry at 19 years of age and earned €80,000 a year are writing themselves off, claiming there is no job that can even deliver half that wage for them.

Business needs to be supported, measures for which have been missing from the Government's plans to date. Energy prices are too high. While I accept they have been reduced recently by 10%, there is no reason that Ireland's energy prices should still be higher than the European average. The energy regulatory regime in place needs to be gotten rid of and energy prices reduced to the European average in two years with a detailed schedule on how this will be achieved. If the ESB were to go bankrupt as a result, so what? Energy prices need to come down and the ESB needs to cut its costs if needs be.

We need to use the opportunity of this recession to develop a new system of local authority funding and remove rates from businesses. We must stop expecting businesses to carry the entire costs of local government. Certainty is needed with the minimum wage. I suggest it is frozen for two years so that employers and employees have certainty about costs and incomes. The existing joint labour committee rules, employment regulation orders and registered employment agreements need to be reviewed, as well as the national pay agreement which has gone out the window anyway.

The reduction of red tape is also important. Inserting clauses in leasing contracts which do not allow rents to be reviewed downwards must be made illegal as the practice hits businesses badly. There must be a proper public procurement system that gives small and medium-sized enterprises an opportunity to win government contracts which they are currently finding difficult. The work permit system needs to be reviewed as to whether they should be given for certain jobs when there are people in the country who can take them up. Employers' PRSI contributions must be suspended for those companies taking on new employees.

I understand an announcement is imminent that Skillnets will be cut back by a further 25% this year. That is a big mistake. Skillnets provides training through 100 different companies across the country, doing a good job with enterprise-focused and led high-quality training. There are no empires in operation within Skillnets. It is not like FÁS; it works very well. It is a mistake to reduce the Skillnets budget from €26 million to €21 million — a decrease of 25%.

There is no real evidence of the Government's willingness to reduce the budget of FÁS, which spends €140 million on administration and corporate affairs and a further €140 million on services to business. The latter is, in the main, handed over to the social partners for them to spend as they please. The Government should be bringing about its cuts in respect of these budget lines within FÁS and not in respect of CE schemes, apprenticeships or Skillnets. As already stated, Skillnets works very well and, if anything, its budget should be increased and it should be asked to assume responsibility for training some of those who are newly unemployed.

I welcome the motion. The situation we face is serious but not hopeless. The Government's policies, as outlined in the amendment, are hugely disappointing. For the Government, it is a question of managing rather than reducing dole queues. We want to reduce those queues and an economic plan — as opposed to a mere fiscal plan — will be required in that regard in order to support business and get people back to work.

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