Joan Burton (Dublin West, Labour) | Oireachtas source

Since taking office the Government has made significant progress in restoring sustainability to the public finances. We have worked hard to build a new and sustainable economic model for the country from the ashes of Fianna Fáil's debt-fuelled property bubble that we inherited. In recent weeks and in the past six months we have been heartened by the new jobs announcements. Announcements by the Kerry Group and Paddy Power are a clear statement of confidence in the economy and a strong signal that Ireland is a good place in which to invest and grow businesses. That is particularly striking in terms of foreign-direct investment, especially potential investment from the United States. The United States sees potential, as well as being aware of the crisis and crash that has occurred. While that is good news for all of us, big challenges remain, of which, undoubtedly, the most significant are the difficulties presented by employment and unemployment challenges. Last week with the Taoiseach and the Minister of State, Deputy Perry, I attended the launch of the first Intreo centre in Sligo, which was an important step On the road to changing the Department of Social Protection and stepping on the road to recovery.

It is one of the central elements of the Government's twin track approach to increasing employment and reducing unemployment, involving the Action Plan for Jobs and the Pathways to Workinitiative. The Action Plan for Jobs is tasked with creating new jobs; the priority in Pathways to Work is to ensure new employment opportunities go to people currently on the live register who will then have an opportunity to pitch for whatever jobs become available. If an employer in Sligo has three jobs, the local Intreo office will be able to offer that employer suitably qualified and interested people at whatever level the jobs require. We must rebuild these connections on a local basis with employers.

Intreo offers a new service that provides better and more efficient advice for people who are unemployed in order that they will be enabled to get back to work as quickly as possible and receive the supports they need to become job-ready. It is a new approach to engaging with people who are unemployed. We have taken into account international best practice to ensure we offer the best service possible. In the past the service in Ireland could have been characterised as passive and a benefits-based approach to supporting job seekers. Intreo offers a much more active and targeted approach which is focused on the person becoming activated and on mutual responsibility. The taxpayer is supporting the individual because he or she has become unemployed, but the individual has a corresponding obligation to the taxpayer and the citizens who offer income support in order that they can engage and do their best to get back into work.

Employer support and engagement with the service are critical to Intreo. The Department of Social Protection intends to work closely with employers to support them with their employment needs and provide access to the financial supports available to help them to growtheir workforce. To date in 2012, our Jobs Ireland service has advertised over 50,000 job opportunities, representing a diverse range of industry sectors and occupations. It is interesting that last year 140,000 people left the live register to get work. Those involved in employment will know that people often get work for a period and then return to the live register - there is a turnover. However, 140,000 people left the live register, not to emigrate but to find work in Ireland. We have to ensure people on the live register have the maximum opportunity to fill vacancies.

Employers have found the service useful. We want to work closely with them to develop and enhance the services provided in order to ensure they reflect the needs of business communities. We want to ensure employment opportunities are offered to people who are currently on the live register. The employer job (PRSI) incentive scheme which exempts employers from liability to pay their share of PRSI for certain employees for 12 months, was extended into 2012 and to cover the first 18 months of employment, as part of a range of supports aimed at assisting employers in providing employment opportunities for unemployed persons. In order to promote these services, build links with employers and find out from them what they would like from the Intreo service, I am hosting a series of seven business briefings around the country. These briefings started last week in Limerick. It will take time to build up employer confidence in our services, but I am confident that we will succeed. In JobBridge we have had the very satisfactory experience, with the 5,000 places made available, of having almost 11,000 people take part, with 5,000 completing the programme and 5,000 still taking part.

A survey and examination has been conducted by Indecon. One of the experiences I have found as Minister is that one receives surveys from bodies such as the ESRI that offer critical examinations. However, these have been based on work done three or four years earlier when the employment market was different. It is interesting that many people who have participated in the JobBridge programme have gone on to find work with the same or another employer, which is what the programme is about. Most of the people who avail of the opportunity have been in the 25-35 year age category, but the placement rate has been highly satisfactory. The programme is not for everybody: it is a specific programme for those who benefit from an internship opportunity.

I refer to stimulating the domestic economy. While the foreign direct investment and exporting sectors of the economy are witnessing very strong and sustained growth, this is not the case for the domestic sector. That is why the Government has directed so many of its efforts at stimulating domestic demand, including the measures included in the jobs initiative that have lifted the tourism sector and the recent stimulus package that will deliver significant investments in labour intensive infrastructural projects. We are spending a lot of money building and developing schools which is very important because it will provide localised employment in badly needed, small-scale construction projects. We must go further, however, and focus, in particular, on the implementation of policies that assist domestic demand, including making credit more widely available for SMEs by ensuring the pillar banks meet their lending targets.

It is interesting that the policy that ranked highest in the US Congressional Budget Office's evaluation of the 2009 Obama stimulus package was the one on the extension of the duration of unemployment insurance. The reason was that the money was all spent in the domestic economy. This analysis echoes something by which I have been struck since I became Minister for Social Protection. Welfare expenditure acts as what economists often call a Keynesian "automatic stabiliser''. This means it acts in a counter-cyclical manner to support the domestic economy by putting money into the hands of consumers and thus into the tills of businesses, many of which are small and medium-sized. That is the reason many American economists, for example, Joseph Stiglitz, write very favourably about the European model of having strong social welfare and income supports because they enable the spend in the domestic economy which keeps local businesses, large and small, at work.

The Department of Social Protection makes approximately €20 billion in payments to beneficiaries. Most of the €188 paid per week to a recipient of jobseeker's allowance is spent in the economy. If we consider pensioners, almost all of their money is spent in the economy. We must ask ourselves what is the impact of social welfare payments on domestic business. It is very strong. This is the case, even though not all of the welfare spend is targeted as effectively as it could be, a point I accept. Last night I indicated to the House how astonished I was to find, as Minister, that 300,000 people, or 16% of the working age adult population in Ireland, were in receipt of an illness, disability or invalidity pension. That is a very high number of people in the labour force who are in receipt of such a payment, compared to the number in most other countries. We have to think about this and about how we can help more of those involved who have an illness and recovered to get back to work. These are the social welfare problems everybody in the House must consider. We have to reform the system of welfare to make it more effective and ensure it does not act as a disincentive to employment or promote welfare dependency. Its central aim must be to engage with people to help them out of dependency on a social welfare income to become independent and financially self-supporting. If they cannot get a job in the current jobs market, which is difficult, it must help them back into education and training.

We want to move away from an economy that was based on a bubble in construction to one that is real. The level of construction is too low.

We have fallen from the height where some 25% of the domestic economy was dependent on construction to a point where the level of dependence is way below 10%. The norm in this regard for most modern economies would be 12% or 13%. That is why the building of schools which leads to the creation of local employment is so vital for a recovering Irish economy.

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