Brendan Howlin (Wexford, Labour)

It is further developing the pathways to employment programme which will provide interaction with each unemployed individual at clear milestones. The Department of Social Protection is doing important work which will underpin this enhanced approach to activation. It is developing a profiling system which will allow for a ranking of jobseeker claimants according to their probability of long-term unemployment and which provides the capacity to target resources to those who both need and can benefit from such activation measures.

It is essential to focus on cost-effective programmes and those programmes targeting the most disadvantaged groups and those most at risk of losing contact with the labour market. A worrying feature of the live register profile is the number of people who have lost skilled jobs in areas such as the construction sector because there will be no demand for their skills in the foreseeable future. We will not see high volumes of employment in the construction industry in the foreseeable future. This is the reason some specific measures, such as additional places on the back to education initiative and other specific skills training measures, are being targeted at adults with less than leaving certificate qualifications. It is an unfortunate outcome of the so-called economic boom that many young people, young males in particular, left school early to take up relatively unskilled employment in the construction sector. They need specific interventions to prepare them for other work opportunities that will become available in other sectors. If we are to support job creation, it is vital that we reduce the cost to employers of taking on new employees. The lower rate of employer PRSI on jobs that pay up to €356 per week will be halved from July this year until the end of 2013. Employers can generate new jobs only if they have the right incentives and the cash to invest in the growth of their businesses. As part of the jobs initiative, the Government will ensure employers are given greater access to credit and will support small and medium-sized enterprises by initiating a tendering process for the development of a temporary partial credit guarantee scheme. We need to get money into such enterprises. We will promote greater access to procurement opportunities for small and medium-sized enterprises. If we can open the procurement system to more Irish companies, we can do a great deal. The Government intends to initiate a microfinance start-up fund to provide loans for small businesses.

We need to support specific sectors such as tourism. This critical sector is partially export-orientated because money that comes to Ireland from overseas is as good as money from the sale of Irish goods in other countries. Tourism provides employment across all regions and skill levels. Accordingly, yesterday's jobs initiative announcement placed a significant focus on measures that would be targeted at stimulating the tourism sector. The second rate of VAT will be temporarily reduced to 9%, with effect from 1 July until the end of December 2013. It will apply primarily to restaurants, catering services, hotels, holiday accommodation and various entertainment venues. Deputy Mick Wallace will be interested to hear that when I spoke to my local radio station this morning, I learned that this measure had been warmly welcomed by the tourism sector in the county. It will be welcomed across the country. The air travel tax rate is to be reduced to zero on a date to be fixed by order, subject to agreement being reached with the airlines to bring more passengers to Ireland. We have invested millions of euro in our very good tourism product because we need people to come here. We can facilitate this by making it affordable and breaking down the barriers to access. Later today the Minister for Justice and Equality will announce an important reform to the visa application system for entry into Ireland which will make it much easier for overseas visitors to come here.

As well as providing direct employment, well targeted public infrastructural investment can stimulate economic activity and have a significant indirect job creation impact in the medium term. In this regard, a number of changes to the capital envelope were announced yesterday. An additional €30 million will be made available for school works this year, predominantly under what used to be called the summer works programme. Some €20 million will be reallocated from the existing budget of the Department of Education and Skills and an additional €10 million will be funded from the levy on pension schemes. An additional €60 million will be invested in regional and local roads. Those who travelled throughout rural Ireland during the recent general election campaign will be aware of the need for extra money for county roads. An additional €15 million will be spent on local sustainable transport projects such as cycle lanes, pedestrian routes and park and ride facilities.

Some €30 million will be invested in the national energy retrofitting programme, with €19 million being funded through the levy on pensions and €11 million being sourced from the existing allocation of the Department of Communications, Energy and Natural Resources. It is hoped the retrofit project will not be a short-term one. In the context of the comprehensive spending review, we will work on seeing how this important investment which is reasonably job-rich can be rolled out into the future. A further two bundles of public private partnership schools will be commenced in areas in which additional infrastructure is required beyond 2016. The aim of this approach is to make the impact of these measures last for as long as possible. When taken together, these measures will generate employment-intensive economic activity throughout the country.

The importance of immediate action to stimulate the labour market should not overshadow the need for structural improvements that will yield benefits in the longer term. I recognise that innovation and education are central to our longer term future. Therefore, I am announcing a relaxation of the numbers ceiling that applies to non-Exchequer funded posts in the higher education sector. The numbers ceiling provided for in the last economic control framework for that sector allows for a modest increase in the number of specialist posts that can be funded by third parties, as long as the posts in question are funded on a full recovery basis, including a 20% charge on the deferred pay costs associated with future pension entitlements. This applies regardless of whether the third party funder is an Exchequer agency or a non-Exchequer funder such as the European Union or private industry. It represents a significant concession at a time when public sector numbers generally must be reduced, as everybody knows. In order to facilitate the maximum possible employment creation potential of the third level sector, while encouraging institutions to seek to diversify their sources of funding, I propose to allow even greater freedom for institutions to recruit researchers and other specialist staff where this does not involve any cost for the Exchequer, including the deferred pension cost. Accordingly, I am announcing the removal of the ceiling on the number of non-Exchequer funded specialist posts that may be created in higher education institutions, as long as they are funded on a full recovery cost basis. It is envisaged that similar arrangements will apply to contract posts involved in research activity in non-commercial State agencies.

It has been brought to my attention that the new system for costing research projects on a full cost recovery basis, including deferred pension cost, is posing difficulties for some project proposals already in the pipeline. I refer to proposals that were well advanced when the new arrangements were introduced earlier this year and that had already been submitted and agreed or substantively agreed. To avoid the delays or financing difficulties that would be associated with having to reopen the issue of funding for such projects, I am proposing to introduce transitional arrangements for well advanced proposals in the pipeline. They will be permitted to continue to proceed under the old arrangements. In other words, the requirement to include a 20% pension charge will not apply in such cases already in the pipeline. Any requirement to fill staff vacancies that might arise during the lifetime of projects approved under the transitional arrangements, or projects already in train, will be able to be met under the old arrangements for the remaining duration of the project.

The measures I have outlined will not rejuvenate the economy or the jobs market overnight. The jobs initiative is simply the first step in ensuring we make the best use of our resources and deliver real change for the taxpayer. The aim of reforming the public service to deliver better results without additional resources - we do not have such resources and are not likely to have them in the immediate future - is the driving concept behind the comprehensive review of expenditure and the capital review. In both reviews, I am determined that we will realign public expenditure and investment in order that they support an economy driven by knowledge, which focuses on exports and can support employment and higher living standards for all our people. Both processes are under way, as Deputies are aware. They will involve a root and branch evaluation of the expenditure of all Departments and bodies within each departmental remit. This is at the heart of the project spelled out in the programme for Government which will last from 2011 to 2016.

As a nation, we are facing some difficult years. Savings will have to be secured in all areas of public activity and resources will have to be redirected to core priority areas. There is no scope for wasteful expenditure, lax management or the preservation of old priorities just because they happen to be embedded in old spending lines. For that reason, the important comprehensive spending review under way is a cornerstone of Government policy. I have been involved in the process of meeting these objectives. I have met Secretaries General and spoken to managers and representatives of workers. People understand the importance of achieving all the objectives set out in the comprehensive spending plan, on both the current and capital sides. It is not business as usual. We will find a transformational way of getting better value and flexibility within the public service into the future.

Yesterday, the Government delivered on its promise to bring forward an immediate jobs initiative. The initiative is intended to restore confidence among consumers and investors. By boosting activity where we can and ensuring extra activity is spread geographically across the country, we are seeking to encourage people to have confidence again and begin to spend more in the economy. This is not the Government's last word on jobs. It is only a beginning and there is more to do but we are starting as we mean to go on.

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