Wednesday, 24 October 2007
Question 76: To ask the Minister for Enterprise, Trade and Employment the action he will take to tackle the projected rise in unemployment in 2008; his views on the ESRI forecast in this regard; and if he will make a statement on the matter. [25673/07]
The total approved staffing complement for the Office of the Director of Corporate Enforcement, ODCE, has already been increased this year from 37 to 41 posts. A further increase of four posts is planned to take place by the end of the year. The recruitment process in this regard is under way. In addition, I understand the director is pursuing with the Garda Commissioner the possibility of additional Garda staff. The possibility of further increases in the staffing of the ODCE in 2008 and beyond will be examined in the context of Government policy in respect of public service numbers.
The pre-budget Estimates for 2008, published on 18 October by the Tánaiste and Minister for Finance, provide for an increase of 3% in the allocation to the ODCE. Any further increases in the office's financial allocations will be subject to review by my Department in consultation with the Department of Finance.
Unemployment currently stands at 4.5%. The ESRI projects that it will rise to 5.6% in 2008. It also forecasts that employment will grow by 2.5% — 50,000 — this year and by 0.6% in 2008. The pre-budget outlook is more optimistic in this regard and states employment will grow by 3.5% this year and 1.25% — 26,000 — in 2008.
Employment has increased by 259,000 in the three-year period since 2004 and the number in employment is approximately 2.1 million. It was generally accepted that this rate of growth could not continue and the economy is now entering a period of adjustment. It should be emphasised that the forecasted growth rate, although lower than in previous years, is still impressive by international standards and ahead of the rates that obtain in other EU countries.
The range of services provided by FÁS will be available to anyone who becomes unemployed. This will include active engagement with persons on the live register with the objective of helping them to obtain jobs, either directly or through further training, education or work experience. This will include access to the various training and employment programmes provided by FÁS. FÁS is also placing particular emphasis on the training of low skilled workers in vulnerable industries. This is to ensure that in the event of becoming unemployed, they will have the skills necessary to make the transition to other employment.
The development agencies — IDA Ireland, Enterprise Ireland and the county enterprise boards — will continue to promote job creation through the delivery of programmes to assist the enterprise sector to develop and thereby create new jobs.
I was shocked by the statistics contained in the pre-budget outlook and the ESRI report. Unemployment has risen from 3.7% in 2001 when it bottomed out to 4.7% today. The Government seems to have thrown in the towel when it comes to employment and has clearly admitted that unemployment will rise to 5.5% next year. The latter will mean that there will be in the region of 200,000 on the live register which in the past was seen as a serious psychological barrier. By stating employment growth will fall to 1.25% in the coming years, the Government is effectively saying the number of jobs that will be created in 2008, 2009 and 2010 will, in total, be smaller than the number created this year. Essentially, its forecasts are suggesting a serious deterioration in employment figures. Does the Minister accept the projections put forward by the Department of Finance and the ESRI? Does he accept that the Government has thrown in the towel in respect of employment? Has he examined international comparisons and discovered what is obvious, namely, that our unemployment rate will overtake those of our major competitors next year?
The EU-27 average for unemployment is 6.9%. The projections made fall well below this figure, which is important. We must be careful as regards the language we use. We certainly have not thrown in the towel. The economy is robust and performing well in international terms. I have just come from the launch of Enterprise Ireland's new strategic vision for the next three years where it has set very ambitious targets for Irish-owned companies in terms of the following: new exports, the participation in research and development to develop new products and services, high-potential start-up companies and scaling up companies to grow significantly, internationalise and globalise. We are taking a very resilient, forward-looking approach to employment creation and protection, which must be achieved through innovation and investment in research and upskilling. If one looks at the national development plan, one will see within it the fundamental pillars that will underpin Irish competitiveness into the future and ensure that we can continue to compete internationally.
Deputy Varadkar correctly referred to the stunning achievements of the past number of years, although he did not use that language nor would I expect him to. Nonetheless, relative to any other country, the scale of employment growth has been very significant. In over a decade, we have gone from having 1 million people employed in the workforce to 2.1 million. Every economy evolves and goes through cyclical periods and we are going through one at the moment. However, the key issue for us is ensuring we have the right macro-economic policies to ensure we can become a centre where new products are produced and new services are conceived and delivered and that people internationally see us in that light.
The Minister's words are very nice and if I did not know better, I would be re-assured by them. However, like everything else, it is lip-service. The Minister suggests the economy is robust and the Minister for Finance suggests that it has not been stronger for ten years. In reality, we see that the Minister's own Government accepts that unemployment is going to increase, tax receipts are going down and the deficit is going to rise.
The Minister cites the EU average of 6.9%, which I accept. I accept that unemployment is higher in Romania, Poland and various other countries in eastern Europe. I will cite some other figures.
I accept that France, which is a country with a long history of structural socialism, and we all know what that does, has a higher rate of unemployment. I will cite some other examples. Does the Minister accept that the UK has an unemployment rate of 5.4%, the US has an unemployment rate of 4.6%, Australia has an unemployment rate of 4.3%, South Korea has an unemployment rate of 3.7% and Norway has an unemployment rate of 2.7%? These countries are our real competitors in the global market, not France or Romania.
Deputy Varadkar is taking current figures for the other countries and comparing them with projected forecast figures for next year. I invite the Deputies to look at all previous forecasts for the past ten years. We could do an interesting assessment of how many of them were actually correct.