Ciarán Lynch (Cork South Central, Labour)

I welcome the opportunity to speak on this motion and thank Deputy Cowen for tabling it. In responding to the motion before the House, I would like to deal with three particular issues, including what Government action has been taken since this Government took office at the beginning of this year and the Sinn Féin amendment. I note Sinn Féin's absence from the House this morning. It is one thing to be absent for a debate but to absent when one has an amendment before the House is bad manners and disrespectful. The final issue on which I will speak is the Fianna Fáil motion before the House.

The EU-IMF agreement commits the Government to a further adjustment of at least €3.6 billion in the forthcoming budget, including a reduction in expenditure of €2.1 billion. The Department of Social Protection has a major contribution to make in achieving a more balanced budget as it accounts for almost 13% of GDP. The Department of Social Protection is a major area of expenditure in this State and will have to be examined in the context of the forthcoming budget. Examples of expenditure in the Department can be broadly divided into three areas, the first of which is supports for people of working age, which accounts for approximately 55% of overall expenditure or just under €11 billion, including job seeker's allowance and benefit and carer's allowance in respect of which the amount is €762 million per annum. The second area of expenditure is retired and older people, which accounts for almost 29.6% of overall expenditure or nearly €6.1 billion. Some 60% of the Department's budget allocation of €3.6 billion is spent on the contributory State pension, which is the single biggest social welfare scheme. A further €951 million and €920 million will be required in the future for State and non-contributory State pensions and widow and widower's contribution pensions respectively. The third area of expenditure is support for children and families, which accounts for almost 12% of expenditure or just under €4 billion of the Department's annual budget. More than €2 billion is spent on child benefit. It is estimated that almost €700 million will be spent on the qualified child increase and that almost €200 million will be spent on family income supplement. These are major areas of expenditure.

This debate is about finding the most effective way of dealing with unemployment and the social welfare issue in this State. We know that when a job is lost the cost to the Exchequer in social welfare payments and ancillary supports, be it mortgage interest supplement, rent supplement and so on, is approximately €20,000. That does not take into account the personal cost of unemployment and the type of anguish and long-term difficulties it can cause for families and individuals. The most positive way of addressing the social welfare issue is to reduce the number of people who are unemployed and to facilitate the maximum number of unemployed people to take up employment or become self-employed, which is the main priority of the Government. The Government set out its stall in this area as soon as it took office by way of the jobs initiative in respect of which a budget of €500 million has been provided, a budget we were told by the outgoing Administration could not be provided because the EU-IMF deal could not be renegotiated. However, within a short period the Government set out its stall and showed that job creation is its number one priority.

Some examples of the jobs initiative approach is the reduction from 8.5% to 4.25% in the rate of employers' PRSI payable on behalf of employees on the national minimum, which is a significant incentive for employers to take on new staff. There has also been a reduction in VAT from 13.5% on 9% in respect of a range of tourism related goods and services. Feedback from that sector indicates this measure has been positive. For example, hotel accommodation in the constituency of West Cork, which is the constituency of the Acting Chairman, Deputy McCarthy, increased following the introduction of this measure. Many tourist regions in Ireland have recorded a positive impact of this measure during the summer in 2011. As mentioned by my colleague, Deputy Phelan, the national internship programme, which provides work placement for six or nine months, was also introduced.

JobBridge assists in breaking the cycle in which jobseekers are unable to secure a job without having experience as a result of being new entrants to the labour market following education, or as unemployed workers who have trained in new skills. The scheme also gives a real opportunity to gain valuable experience to bridge the gap between study and the beginning of a working life.

Another aspect of JobBridge needs to be explained. At present, graduates leaving university and institutes and education are unable to use their qualifications in the employment market. JobBridge allows them to obtain work experience so that when the economy picks up they will have both their qualifications and some real work experience. The scheme allows people to continue their studies in the workplace and it gives them an edge when looking for long-term employment. I am happy to report that as of Thursday, 27 October 2011, a total of 2,508 internship opportunities with host organisations are available on the website. In addition, 2,185 interns have commenced internships under the JobBridge scheme. The participation in the scheme has been successful.

Another measure implemented by the Government and which was a key commitment in the programme for Government is the establishment of a commission on taxation and social welfare. Its task is to examine the operation and the interaction of the tax and social welfare protection systems; to recommend cost-effective solutions as to how employment disincentives can be improved to achieve better outcomes in the area of child poverty; and to identify the specific practical, institutional and administrative improvements of their operation.

This is just one of a number of reforms which the Government proposes. Organisational transformation is required. For example, as has been mentioned by other Deputies, the community and employment services operated by FÁS and the community welfare service which was formerly part of the HSE, are being transferred to the Minister's Department. These transfers are a key element and have been set out clearly in the programme for Government. We have seen the waste in these Departments during the time of the previous Administration. We have restructured these services in order to target those participating in those programmes rather than being for the benefit of those running the services. When fully completed, this will be a new organisation providing efficient and complementary income maintenance and related services to families with children, people of working age and retired and older people.

It is surprising that Sinn Féin Deputies are not present in the Chamber to listen to the debate on their proposed amendment.

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