Mary Coughlan (Donegal South West, Fianna Fail)

The global economy is facing a sustained and unprecedented economic challenge. Every economy in the developed world is struggling to cope with the global economic storm, exacerbated by credit constraints and prolonged by a decline in consumer and investor confidence.

Ireland is not immune to those challenges, which are impacting negatively on growth and employment. Domestically, as the recession which commenced during 2008 deepens further, GNP is projected to experience its sharpest decline on record, contracting by 8%. As a result, a cumulative loss in national income of around 13% is expected between 2008 and 2010. However. as the expected international recovery gains momentum and the sharp shock in residential housing output passes through, Ireland's economic growth rate is expected to turn positive by 2011.

In the interim, we must continue to pursue appropriate policies to position the economy to benefit from the global recovery when it eventually emerges. Our labour force continues to be highly skilled and flexible. We continue to invest in education at all levels to ensure the skills demanded by our increasingly knowledge-intensive economy are available. We are also demonstrating wage flexibility in both the public and private sectors, a significant achievement which many countries wish to emulate. There are also adjustments in work practices and other labour market costs are changing in order to safeguard employment.

Our economy remains flexible and resilient and this will facilitate an adjustment to reflect the prevailing environment. For its part, the Government remains committed to providing a pro-enterprise environment and to maintaining our relatively low tax burden on business. It also is maintaining capital spending at a high level by international standards. This will allow it to continue its investment in productive infrastructure, which will help enhance our competitiveness. Through implementing the correct policies now, our recent progress will be safeguarded and our future prospects will be secured. The European Commission has endorsed the measures the Government has taken in its recovery strategy and it also has the support of the European Central Bank. These non-partisan bodies recognise the extent and appropriateness of the measures the Government has taken to bring the public finances under control.

The Government has a proven track record of managing a successful and vibrant economy. The measures it has taken in recent months are designed to address our present difficulties and to ensure a return to sustainable economic growth and the creation of more employment. The Government is committed to continuing to take the necessary difficult decisions to achieve this goal. However, one must not forget that the economy still retains many of its underlying economic strengths. These strengths are borne out by the recently published World Competitiveness Yearbook of 2009. It is encouraging to note from this report that Ireland's strengths lie in its continuing attractiveness for investment. It is first for real corporate taxes, investment incentives, foreign investor freedom and skilled labour, third for flexibility and adaptability of people and fourth for labour productivity.

In spite of the difficult economic environment in which we currently operate, the underlying strength of the Irish economy is clearly evident when one considers its trade performance and the continued impressive success of its exporters. Last year, Ireland's trade surplus was a very healthy €21.4 billion. This was a very impressive performance, especially when one takes account of the deep global recession and the adverse exchange rate between the euro and the currencies of our two largest export markets, namely, the United States and Britain. If the experience of recent years has taught us anything, it is that trade is the cornerstone of Ireland's economic success and trade undoubtedly will be the instrument by which Ireland positions itself to benefit from the future global upturn. Even in these difficult times, many of our export-orientated companies continue to excel. It therefore is clear that we must build on these strengths and use them to our advantage to ensure the Irish economy is well positioned to benefit when an improvement in the global economy takes place.

While Ireland still retains many areas of competitive advantage, one also must acknowledge that the global economic downturn has had significant implications for its economy as a whole. This is most evident in the sharp rise in unemployment which has been experienced. Although the live register figures continue to rise, the monthly rate of increase has been abating since February. In addition, despite the major downturn in the economy, last month more than 16,500 people left the live register because they found work. In the past year, almost 145,000 people left the live register because they secured employment. This is a positive trend that shows there still are jobs available and that the Government activation measures are assisting the unemployed to develop their skills and to secure employment.

In response to the increasing numbers of people on the live register, I am working closely with my colleagues, the Minister for Social and Family Affairs, Deputy Hanafin, and the Minister for Education and Science, Deputy Batt O'Keeffe, to ensure that appropriate responses are developed and put in place to meet the up-skilling needs of those who are losing their jobs or facing uncertain employment prospects. My Department alone is investing €1 billion in the provision of a range of labour force measures that will provide training and work experience opportunities to assist those who have lost their jobs. FÁS employment services, together with the local employment services, have put in place measures to double the capacity to cater for the rise in referrals from the Department of Social and Family Affairs. The implementation of such measures has increased the annual referral capacity to 147,000 persons in 2009. These measures and others represent a significant step in meeting the huge challenge of supporting the unemployed.

In a difficult employment climate such as that which we face at present, the importance of training and education is vital for everyone within the workforce. The impact such opportunities can have for those who are out of work and who seek to rejoin the labour market cannot be overstated. I have almost doubled the number of activation training and work experience places provided by FÁS to 128,000 to assist individuals through the provision of education and training opportunities. This is a substantial increase from the 66,000 places that were available at the end of last year. Specifically, there are additional training places on short courses available to the unemployed. The courses are designed to be flexible in responding to individual training needs in the development of new skills and competencies. These places are specifically tailored to individuals who wish to add to their existing skills level and improve their prospects of re-entering the labour market.

In addition, in the supplementary budget the Government announced its intention to establish a programme that will provide valuable work experience to individuals who are unemployed and who have had limited experience to date. My colleague, the Minister for Social and Family Affairs, Deputy Hanafin and I jointly launched the work placement programme on 2 June last. This programme will provide 2,000 individuals who have been unemployed with a six-month work experience placement. Under this programme there are two streams, each consisting of 1,000 places. The first stream is for graduates who before this year have attained a full award at level 7 or above on the national framework of qualifications and who have been receiving jobseeker's allowance for the last six months. The second stream is open to all other individuals who have been receiving jobseeker's allowance for the past six months. Under this stream, 250 places are being ring-fenced for those under 25 years of age. As a result of the co-operation and dialogue between the Departments of Enterprise, Trade and Employment and Social and Family Affairs, the scheme has been innovatively designed to allow participants on both streams of the programme to continue to receive their existing social welfare entitlements from the Department of Social and Family Affairs for their duration on the programme. I believe this scheme will work and there is great enthusiasm to participate in it. Assuming it works, neither Deputy Hanafin nor I will be found wanting in respect of increasing the availability of places. We will learn from the first 2,000 individuals to ensure the outcomes will be beneficial to the clients.

In a further initiative, on 2 June my colleague the Minister, Deputy Hanafin, and I launched the short time working training programme. This new initiative offers individuals the opportunity to receive training that suits their specific requirements. In respect of individuals who are on short-time working, this programme will provide two days training a week for 277 workers over a 52 week period. Again, this is a pilot programme to ascertain how this will work and whether it will do the job as it should. This issue was raised in a previous debate in this House and the Government will be forthcoming in analysing the outcome of this training programme on its completion. Support for jobs and for those who have unfortunately lost their jobs, remains at the centre of our collective efforts. This is the reason we must be imaginative and must break new ground in intervening to sustain jobs. At present, the Government is examining possible new approaches regarding the retention in employment of people who are in danger of becoming unemployed. This is currently being discussed with the social partners.

Since the beginning of 2008, there has been a significant contraction in activity in the construction sector. This contraction has been accompanied by a substantial reduction in the numbers of people employed in that sector. This has had a severe impact on individuals who are currently undertaking an apprenticeship. The Government is fully aware of the difficult situation in which such redundant apprentices find themselves. This is the reason the Government is committed to assisting redundant apprentices to gain employment as soon as possible in Ireland or abroad in order that they may complete their apprenticeships. I have introduced a wide range of measures designed to help alleviate the present situation by enabling 3,600 redundant apprentices to further their apprenticeships this year. The measures include the putting in place by FÁS of a measure whereby apprentices who are made redundant can progress to the next off-the-job training phase in the education sector. This means they do not need to do their on-the-job phase and can go directly to the next off-the-job phase. Moreover, FÁS has introduced an employer-based redundant apprentice rotation scheme to provide support for employers to provide on-the-job training to 500 redundant apprentices when they have released their employed apprentice to a scheduled phase 4 and phase 6 off-the-job training phase in the institutes of technology. In addition, ESB Networks has agreed a programme with FÁS to provide on-the-job training to eligible redundant electrical apprentices at phases 5 and 7. This programme will provide 400 places over a period of 18 months. The institutes of technology are providing an 11-week certified training programme to 350 redundant apprentices who have completed their phase 4 training but to whom another training opportunity is not available.

The key to overcoming our rising unemployment levels is to provide the necessary support to the enterprise sector to create employment. This Government has always displayed a strong commitment towards assisting the continued development of our enterprise sector. In the supplementary budget, the Government made provision for capital investment in enterprise of more than €500 million, through IDA Ireland, Enterprise Ireland, the county and city enterprise boards and Science Foundation Ireland. In doing so, the Government prioritised investment in the most productive sectors of our economy and invested in the creation of jobs by cementing the foundations of export-led recovery and growth. As part of this investment, the Government has established a €100 million enterprise stabilisation fund. The fund, which is administered by Enterprise Ireland, aims to help viable but vulnerable internationally trading companies to survive the current global downturn by supporting their efforts to reduce costs and gain sales in overseas markets and to sustain employment. Sustainable economic recovery will be driven by enterprises that are focused on increasing their exports of innovative products and services in global markets. Companies from all sectors are seeking support. The main issues of concern are the sterling exchange rate, the loss of sales, funding from the banking sector, competitiveness, construction industry and energy prices.

Enterprise Ireland has been engaging with various companies under the enterprise stabilisation fund. It is working intensively with 60 companies to develop definitive project applications to the fund with a view to releasing such funding as soon as practicable. I have met representatives of a number of companies that have expressed an interest in the stabilisation fund. Some of the companies have made successful applications under the fund. I am encouraged by the interaction between Enterprise Ireland and the companies in question. I advise the House that the fund can also be used to assist Údarás na Gaeltachta companies.

The silo approach of the development agencies has definitely gone. There is now a great deal of interaction between them all. I told the House some time ago that we are involved in an economic war. We need to work together, rather than having a silo approach. The development agencies have a role in achieving traction within the economy. The work of those who are involved in the enterprise stabilisation fund will contribute to the stabilisation of vulnerable companies. That will be determined on the basis of market failure only. I am aware that access to finance is a concern for small and medium sized enterprises at start-up and development phases. The key message being transmitted by everyone involved in business and enterprise is that access to working capital is an abject frustration. That message has been articulated on the floor of this House and at today's meeting of the Select Committee on Enterprise, Trade and Employment. I accept that we need to stabilise the public finances and put in place a viable and functioning banking sector. We have articulated that frustration. We appreciate that difficulties exist. It is expected that NAMA, if it fulfils its role in a fundamental way, will allow the banking system to lend to businesses and facilitate the taking of risks once more.

My Department's agencies have met the relevant banks in recent times. As a result, some people have been seconded from Enterprise Ireland into the banks. That has been mutually beneficial. I will have a key focus on ensuring that small and medium sized enterprises can access the money that has been made available through the European Investment Bank. Such enterprises should be able to use the seed capital mechanisms that were agreed under the recapitalisation scheme. The relevant agencies, those representing business and tourism interests and the banks should be able to work together through the clearing house that is being chaired by my Department and supported by the Department of Finance. Additional resources will become available when the Department of Finance's investigation into the availability of credit has been completed. We will see some traction on this issue at that stage. That is a key consideration for everyone in business.

When we investigated the substantial concerns that have been expressed about export credit insurance, it was clear that the issue at stake was not necessarily export credit insurance, although that is important in itself. We discovered that the fundamental difficulty being encountered by businesses in this area related to credit insurance. Over recent months, we have seen a considerable contraction in the availability of credit insurance. It was on that basis that we decided to work with Forfás. I am aware that the Chairman of the Joint Committee on Enterprise, Trade and Employment believes that Forfás does a good job, and rightly so. Forfás has been able to put a number of options together to allow us to further develop the availability of credit insurance. We have been able to reduce the time it takes to go to tender, luckily, as a result of the extraordinary nature of this situation. That is allowing us to work through the risk analysis that is needed if we are to have a functioning credit insurance scheme and to minimise the exposure and risk of the taxpayer, which is incumbent on everyone in this House in light of the lessons that were learned 20 years ago.

I do not suggest that export credit insurance is not important, it is very important. I hope lessons can be learnt from the previous incarnations of this scheme. The approach taken at this time should be targeted and focused. Contrary to what has been said in this debate, over recent months we have examined what other EU member states are providing in this area. They are finding it very difficult and expensive, unfortunately. That will not deter me from making progress on the issue of the availability of credit, finance and credit insurance.

These are difficult times. We could choose to deal with this in an adversarial way. More importantly, we can adopt good ideas and initiatives. A number of the proposals that were made by Opposition Deputies during the Private Members' debate on the issue of activation have been taken on board, some of them on a pilot basis. We are trying to ensure we do not have a difficulty with dead weight. In particular, we are trying to ensure that what does work will work well. I commend the amendment to the House.

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