Séamus Kirk (Louth, Fianna Fail)

I am glad of this brief opportunity to make a few comments. While I am conscious that Members are debating the Social Welfare Bill 2011, inevitably a Second Stage debate allows some flexibility and movement with regard to the points that can be made on different areas and the budget provisions naturally will receive an airing at this time. I will start by considering the principal features of the social welfare cuts that were introduced in budget 2012. I refer to the cut to the disability allowance for young people, the cut by six weeks to the fuel allowance period, the reduction in child benefit for third and subsequent children, the cut in jobseeker's benefit, the slashing of the back-to-school allowance, as well as the cut to the one parent allowance. Moreover, pension eligibility has been cut and those who fall below the threshold of having an average of 48 contributions in the future will find themselves in a position of having reduced pension payments. In addition, the farm assist scheme will be affected and it is clear there will be a reduction in the amount paid to many small farmers in both Deputy O'Reilly's constituency and my own constituency of Louth. Finally, I note the redundancy rebate has been reduced.

There is one point on which everyone present in this Chamber can agree, which is that the total social welfare bill for the Exchequer each year is extremely significant. Moreover, this is at a time when Members are examining ways and means to save resources and money to get back into balance the fiscal position. While this is largely dictated by the troika, the Government freely admits there is flexibility in the changes and provisions it makes. However, there is one area of the social welfare bill to the Exchequer in which highly significant savings can be made. I do not have to hand the figures for the total outgoings in respect of jobseeker's allowance or jobseeker's benefit but it is reasonable to assume that when 480,000 people are unemployed, it is highly significant on either a weekly or an annual basis. If the Ministers for Finance and Public Expenditure and Reform had wished to effect real change to the Exchequer's social welfare bill, they would have considered the area of employment creation. It is generally accepted both by Members and external economic commentators that if one is to create the jobs that are so sorely needed, the domestic economy is the area on which one must focus.

Nevertheless, in a significant provision, the Minister for Finance decided to increase the level of value added tax from 21% to 23%. I have represented a Border constituency for the past 29 years and during that time I have seen the trading equilibrium change periodically. However, there was always one consistent aspect to such changes when the trade went northward in significant volumes. It is not that long ago that there were tailbacks and long queues of cars travelling to Newry, Banbridge, Lisnaskea and other towns and villages north of the Border because the balance of advantage in the expenditure of one's weekly budget lay in shopping in the North. As surely as Members are debating the Social Welfare Bill 2011 this evening, this will happen again on foot of the significant increase in the level of VAT. I do not advocate not having a trading equilibrium on the island whereby people can shop in Newry or Banbridge one week and in Dundalk a week later. I have seen people from south Armagh shopping in Dundalk in past times and they were very welcome. However, whenever there is huge movement one way or the other, retail businesses inevitably are directly affected by the impact of products being bought elsewhere. Inevitably, this in turn affects those who are employed in that specific retail sector.

All Members on both sides of the House accept that to return to a realistic employment position, activation measures must be introduced that will get the domestic economy moving again. However, I assure them that increasing the level of VAT from 21% to 23% is not the way to go about it. When the Government entered office not so long ago, it decided to examine private pension funds and a creaming-off process was proposed to create a fund to create jobs. At the time, there was general acceptance that if it was possible to do it this way, it should be tried. However, since that initiative was announced, there has been a significant increase in the number of people cast onto the unemployment register. This indicates the measures are not working. Members must become much more realistic about this area. They must consider the areas of the economy in which potential exists for clear, tangible and beneficial economic growth. For example, they might consider the primary wealth creation sectors in the economy that for some time have been growing steadily and have contributed substantially to the balance of trade, to the point where the export levels of produce out of the country have been the significant saving grace as far as the economy is concerned.

I read the relevant newspapers regularly and one reads of commercial enterprises here and there which are considering the possibility of expansion in the dairy sector or in growing new crops or which are considering expansion into areas of import substitution. The Minister for Social Protection is representing the Government in the Chamber this evening and I ask her whether it is not time to establish a task force to examine these sectors to ascertain what is the realistic job creation potential therein. If the provision of State support could be justified to ensure that economic growth takes place in such sectors to create the jobs that are needed, surely this should be a fundamental part of the budget provisions that have been put forward over the past week or so. Unfortunately this has not been the case. The announcement of the creation of an activation fund of €20 million is significant and I do not deride it by any stretch of the imagination. However, there must be a focus on the areas in which this money will be spent. One must ask whether, in 12 months' time, one will have succeeded in creating 1,000, 2,000 or 3,000 jobs in those sectors that undoubtedly have potential for such job creation.

All Members tend to be parochial about these issues and in my own constituency, I have in mind the Cooley Mountains, which face the Mourne Mountains across Carlingford Lough. The relevant local authorities have put forward a proposal to build a bridge over Narrow Water, which is the point at which the Newry Canal leaves Carlingford Lough. A total of €40 million is available in the INTERREG fund but it would require the Minister for Finance to put up approximately €1.5 million. It also would require his counterpart north of the Border to put up a similar amount or perhaps more to get that project under way.

I advise the Minister, Deputy Burton, that tourism is one of the areas where jobs can be created. We need to focus on projects in that sector. There is a clear justification for public expenditure on such projects. The Government should examine those areas. If jobs can be created in north Louth or elsewhere in Louth, south Down or south Armagh, they would have a tangible impact on the economy north and south of the Border. We need to focus on those areas. One sure prediction we can make tonight is that austerity alone will not get us out of the problems we are in. We need creativity, innovation and a Government that is prepared to think outside the box, which is a phrase I hate but it captures the point that needs to be made. We need to do those things urgently.

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