John Halligan (Waterford, Independent)

I move:

That Dáil Éireann:

recognises:

— the unacceptable fact that the current rate of unemployment is 14.5%;

— the crushing toll that persistent job losses, mounting unemployment and heightening emigration levels are having on ordinary Irish people and the desperate need for honesty when addressing this crisis and those affected by it; and

— the particularly devastating impact of recent job losses on areas such as Waterford City and County which have not only seen the direct impact of job losses due to closures of companies such as Waterford Crystal, the Iron Foundry, ABB Transformers, Teva Pharmaceuticals, GlaxoSmithKline and, most recently, Talk Talk but have also experienced the secondary impact that the removal of such vital industry has on surrounding and supporting industries;

condemns the present Government for:

— opting to make good the gambling debts of unguaranteed bondholders at a time when desperately-needed State funds should be invested aggressively in job stimulus initiatives;

— undermining the right of workers to a fair day's work for a fair day's pay with the introduction of a deeply flawed National Internship Scheme that allows employers to recruit often skilled, qualified and experienced individuals into entry and non-entry level positions which in no way, apart from their €50 per week rate of pay, bear any resemblance to an internship; and

— introducing a piecemeal and tokenistic jobs budget and initiative aimed more at producing headlines than creating true growth in employment levels; and

demands that the Government:

— restore the right of workers to a fair day's work for a fair day's pay by immediately addressing the deep flaws in the National Internship Scheme;

— return sanity to the commercial rental sector by eliminating the presence of upwardonly rent reviews in the Irish economy;

— abandon its commitment to pay back the gambling debts of unguaranteed bondholders and instead use State funds to implement a truly effective jobs initiative that promotes education, training, entrepreneurship, meaningful support for the small and medium enterprises (SME) sector and the development of a genuinely 'smart economy'; and

— honestly deliver on its commitment to 'Get Ireland Working'.

I am sharing time with a number of Members from the Technical Group.

I did not get an opportunity last week to thank the Minister for his visit to Waterford in an attempt to try to stop the closure of TalkTalk. I genuinely mean that. I did not get an opportunity last week because before the Minister came into the House, I was turfed out of the Dáil for a week, as the Minister is probably aware.

On a serious matter, the latest report on the economy issued by accountants, Ernst & Young, states that it could be 2022 before employment regains even 2007 status. That is a fairly damning report. It also states that 54% of all those out of work and without a decent income have been in that position for well over a year or more.

There has been a 170% increase in youth unemployment in the past two years and there is huge despondency among the youth. All one has to do is speak to youth organisations and read reports of those who deal with youths who are facing the terrible consequences of unemployment and not being able to be employed, despite whatever qualifications they might have. The latest statistics also show that only 20% of all FÁS trainees in the past two years have managed to get some form of work.

Whatever way the Minister looks at all these figures, which indicate that almost 500,000 people are unemployed, they are damning statistics, especially on the previous Government's policies, but they do not look too good for the current Government's policies in dealing with the huge unemployment levels. For instance, a report from the Society of St. Vincent de Paul stated that the vulnerable are on the verge of despair and that in 2010 it received a 35% increase in calls seeking its assistance. All such agencies go on in the same manner. Barnardos talks about increased sourcing of loans from loan sharks, more children going hungry or waiting longer for treatment for illness, and so on. I could go on. What it comes down to is that it is unsustainable to have almost 500,000 people on unemployment benefit.

Many of those job losses are a direct result of austerity measures put in place by the previous and current Governments. Further measures, and we are talking about cuts of €3.6 billion or even more, will further drive down spending and drive the economy further into recession, which will stop growth and inevitably lead to more job losses.

If we examine the current spending figure in this economy, we can see that hundreds of thousands of people are restricted in terms of spending because they have restricted power. I refer to people in low income groups, people on social welfare and so on who cannot spend into the economy and therefore cannot help the economy grow. Thousands of others are paying down debt. That is their first priority and therefore they cannot spend into the economy. Many who are able to spend into the economy, and the statistics show this, are saving because of an uncertain future. All of that is taking money out of circulation.

Does the Minister accept that if people do not spend and money is taken out of circulation, the consequence is that people earn less, buy less, products are not sold and this ultimately leads to job losses? That is evident in clear statistics which indicate that from 2010, almost 1,200 small business were deemed insolvent. Thousands more were shedding jobs, with thousands more close to the edge, so to speak. As people buy fewer commodities, all those companies let people go, and that is a consequence of reduced spending. Our argument is that we cannot reduce unemployment by curtailing spending. In fact, we will increase unemployment. That has been shown in economies throughout the world.

Regarding small businesses, all the evidence from the banks is that 50% of businesses were refused credit last year and the year before by banks who could have kept people in jobs. That is in spite of all the promises the Government made and commitments made by the banks.

Surely sound economics at this stage would be to encourage people to spend and not to cut. That generates growth, encourages people to spend in the economy and creates jobs, which will take people off unemployment benefit and reduce the billions of euro we are paying out on unemployment benefit.

The Minister's answer to this is, for instance, the speculative cuts in overtime and anti-social working hours. The Minister made an announcement some months ago and as a result, 240,000 low paid workers in industries such as hospitality, cleaning, agriculture, hairdressing and so on will face pay reductions. Their working rates and overtime rates will be cut. They will not get the full rate for the anti-social hours they work. The Minister announced that he was reversing the €1 in the national minimum wage. All that will do is drive down spending.

The Minister's answer to this problem is the internship scheme, which is deeply flawed. It undermines the rights of workers to a fair day's pay for a fair day's work. No one will tell me that this scheme will not be used to employ part-time workers instead of employing full-time workers . Why would they not take someone off social welfare and give them €50 and perhaps later let a full-time worker go? There is no question that this will happen, and there is some evidence that it is happening already.

On the Minister's job creation proposal, 20% of people who did FÁS courses last year barely got any sort of employment. People do not want schemes. They have enough schemes. They are looking for full-time jobs. It is a question of value for money with FÁS. It must be remembered that it spent €645,000 on junkets some years ago. That is what it did with some of the money we put into it.

What are the alternatives? It costs in excess of €20,000 per year to keep someone on social welfare. Over three years, it could cost the Government €80,000, given the cost of statutory redundancy, stamps, social welfare, fuel allowance, medical cards and so on. The programme for Government states:

Job creation is central to any recovery strategy. Every person who leaves the dole and goes back to work reduces the deficit by an estimated €20,000, spends on average an additional €15,000 on goods and services and also reduces the risk on the banks' mortgage books.

That is pure and simple. Is there no thinking outside the box? Why can we not use that money to take people off unemployment, perhaps by giving it to a small business to enable it to sponsor a worker? That is one way of reducing the deficit.

The Minister for Finance astonished and to some degree confused people a couple of months ago when he urged people to spend to help the economy grow. That is what we are proposing tonight, and other Deputies will discuss how we should create jobs and so on. No economy will grow by cutting. We have to urge people to spend, and we can only get them to do that by giving them a decent wage so they have spending power in the economy. We can then reduce unemployment rates substantially. We must remember that keeping someone in unemployment costs €35,000 a year- I put the Government's own figure to the Minister again. That does not make sense to me.

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