Tuesday, 4 November 2008
Training Programmes: Motion
I wish to share my time with Deputies Deirdre Clune, Simon Coveney, Tom Hayes and Jimmy Deenihan, with the agreement of the House.
"—That Dáil Éireann:
notes that the number of people seeking training programmes will rise rapidly as a consequence of:
the numbers on the live register increasing by nearly 50% over the past twelve months; and
the projected 8% unemployment rate for 2009;
notes that the standardised unemployment rate is at a nine year high with unemployment in Ireland now higher than in the United States, Britain, Japan, the Netherlands, Denmark, Norway, the Czech Republic, Switzerland, Poland, Singapore and South Korea, among others; and
calls on Government to:
restructure publicly funded training programmes to make training provision more responsive to a rapidly changing labour market and economy;
conduct a comprehensive expenditure audit of FÁS to ensure that the taxpayer's substantial investment is getting best value for money;
consider the needs of small and medium sized businesses when developing and promoting training services; and
change the eligibility criteria for the back to education allowance to open up access to further education for the unemployed."
The 30th Dáil is only 16 months old at this stage, yet I note this is the third debate we have had on employment already. In many ways it is a reflection of the gravity of the situation in which we find ourselves and the growing realisation that rising unemployment is the human cost of economic mismanagement.
In the first debate we had on unemployment, about 12 months ago, Deputy Micheál Martin, the then Minister for Enterprise, Trade and Employment, told the House the best benchmark of how a country is doing is its capacity to generate new sustainable jobs and advance the standard of living of its citizens. Ultimately that is what good macro-economic and sound enterprise policies deliver. I agree entirely with Deputy Martin in that regard. Let us therefore apply the Martin tests to the current Government. The first test is to ask whether macro-economic policy has been sound. The answer is certainly that it has not been sound. Public spending has increased by 80% in the past five years, financed by windfall taxes on an unsustainable debt-fuelled property boom. Now it is being financed through borrowings of at least €11 billion this year and perhaps €15 billion or more next year, a deficit that is rapidly getting out of control. The likelihood is that the national debt will probably double by the middle of 2010. By the end of 2011 national debt as a proportion of GDP is likely to be higher than it was when this Administration came to office in 1997. Also, there has been a series of enterprise policies. We talked a good deal about the "dirty dozen" and the "terrible 32". I have my own favourite, the "terrible ten", namely the ten policies the Government introduced which are both anti-enterprise and anti-employment.
The first of these is the national wage agreement which, in itself, is driving up the cost of employment — and risks driving people out of their jobs. The decision to cut apprenticeships was a major mistake. This is one of the few areas in which FÁS does a good job and yet, for some reason, the Minister has decided to cut apprenticeships. There was the failure to make any effort to reform FÁS and the initial denial over several months that anything was wrong with that organisation. Then there were the cutbacks in infrastructural spending, particularly as regards road building, rail building and broadband. I cannot understand the decision in the budget in particular to cut back spending on broadband by 25%, since technology is the growth area of the future.
Then there is the rising cost of doing business, where the Government has literally stood by and allowed utility prices, local government rates and levies to increase. There is the growing administrative burden on companies, which again, has been increased by the budget. The car parking tax will have to be administered inter alia at greater cost to Government. The decision to increase VAT, again, will damage jobs.
I cannot understand the cutback in jobseekers benefit at a time when people are losing their jobs. People who have been working for a year or certainly, nine months, are now being punished for the fact that they have lost their jobs through the cutbacks in jobseekers benefit. A decision to increase capital gains tax will cost jobs as will the failure, in particular, to recapitalise the banks. I have come from a meeting with some sub-contractors from County Meath, whom I met with Deputy Shane McEntee, and the extent of the pressure that small companies are under is really shocking. So many companies are in contact with us all the time who had their overdraft facilities halved by the banks and are now facing the prospect of having to lay off people and go out of business because of the Government's failure to follow up on the guarantee Fine Gael supported, with a strategy to recapitalise the banks.
The result of all these failed macro-economic and anti-enterprise policies is rising unemployment. Rising unemployment is the human consequence of economic mismanagement by this Government. The live register figures will be released tomorrow. I do not know what they contain, perhaps the Minister does. However, I anticipate that the live register will be more than 250,000 for the first time in 11 years. I expect that, within a month or two, if not tomorrow, the numbers signing on will be higher than they were when Fine Gael left office in 1997. I appreciate that is not the case yet, in terms of percentages, but we are getting there fast.
In terms of percentages, we are talking about a standardised unemployment rate of 6.6% at the moment. The ESRI and FÁS say it will be more than 8% this year. Bear in mind that the EU average unemployment rate is 7% and it means we are accepting that Ireland is again going to be a high unemployment country.
Let us look at where we are in relation to other countries: Netherlands, Denmark, Finland, Poland, Sweden, Britain, Norway, Japan, the United States, Austria, the Czech Republic, Malta, Israel, Singapore, to name a few, are countries with lower unemployment than Ireland's. It is probable we shall overtake Italy, Germany and Portugal in the coming months. The Government will, no doubt, argue that this is all down to international factors — and international factors have a part to play in this. However, all countries are feeling the cold wind of occurrences in the international markets, yet they are not all suffering as Ireland is. Unemployment in Germany, for instance, is at a 16-year low, and as I mentioned, Ireland will overtake it within the next few months. The reality is that all the countries I referred to are part of the world we live in, and not on a different planet. It occurs to me more and more that those on a different planet are the Members opposite and the Ministers who do not acknowledge the extent to which the situation in Ireland is so much worse than among our partners and competitors. This has allowed them to get off the hook and not take action.
At present Ireland is losing 720 jobs a week. That effectively works out — including Saturday, Sunday and night-time employment — that we are losing a job every ten minutes. That is an extraordinary situation to be in compared to what it was like when this Administration came to power, when a job was being created every seven minutes. The Small Firms Association said today that these figures should be a wake-up call for the Government, which is clearly asleep. There has been comment about the absence of the Tánaiste in the United States. I do not oppose the fact that she has gone to the United States and believe it is appropriate that the Minister for Enterprise, Trade and Employment should travel overseas. However, there are 52 weeks in the year and the Dáil sits for just over 30 of them. There are 20 weeks during which trade missions could be done. The former Taoiseach, Deputy Bertie Ahern, made a point of doing these in January and I believe that is when they should be done. Perhaps, better than going to the United States in election week — when the focus is very much on what is happening in America — the Minister might have done better, not necessarily to come in here and listen to me, but just to do her job and try to restore Ireland's competitiveness.
When Fine Gael left office, Ireland was the fourth most competitive country in the world. It was the place people wanted to come to, to invest and do business. Under this Government we have fallen into 22nd place and that has not improved at all during the period in which Deputy Martin was Minister, or during the time Deputy Mary Coughlan has been Minister. We are getting to a stage where almost half the multinational companies that had invested in Ireland are saying they would not do so again, if they were in a position to make such a decision. Rather than going to the United States during a Dáil session, perhaps the Minister should take action and start to make Ireland competitive again because it is only through trade that we will get out of this recession. We cannot borrow, tax or cut our way out of it, so we must trade our way out, and that means addressing the issue of competitiveness.
It seems to me the Government has thrown in the towel on employment, in the same way that it has on the economy and public services. Everything is somebody else's fault and the Government is powerless to act, on all occasions. However, there is a better way. There is still hope for Ireland. I am not despondent about the future in the way that many are. We can still have a balanced budget, full employment and high quality public services. That can only be done, however, if the right policies are put in place — and they must be put in place now.
The first action to be taken is to address the budgetary crisis. We need to end the pretence that the budget currently going through the House addresses the economic crisis in any serious way. Essentially, it is a hit and hope budget — tax a bit, cut a bit and borrow a bit more and hope something turns up. That will not work. We need to bring the deficit under control. This means abandoning Deputy Brian Lenihan's budget and adopting the alternative proposals set out by the Fine Gael party, which will bring us to a situation whereby borrowing will start to fall back.
The next most important action to be taken is to invest in education and training and some speakers will discuss that later. One of the key areas where we must invest in training is in construction. We are about to move from a situation where 20% of our economy was construction based to one where only 8% is. This means that more than half of the people who were involved in construction jobs will never be involved in construction jobs again. They need to be retrained for new jobs. We need to identify where those new jobs will be, in IT, the food industry, biotechnology and green collar jobs, alternative energy in particular. A strategy to deal with this should have been in place a long time ago, but if it is not, let us get it in place now.
We need to overhaul FÁS, an organisation that spends €1 billion a year but which does not produce the return we should expect. We must also consider a public works programme, as was done in the past. We have significant numbers of skilled people who are unemployed for the first time who could be used in a public works programme, perhaps run by the OPW, to build schools and develop our infrastructure at a cost at which these projects could not be delivered earlier. We need to consider expanding programmes, such as community employment, CE, in areas of disadvantage. I am not a fan of the community employment schemes as an active labour market measure, but I accept they have an important social role. In areas of disadvantage where high unemployment leads to higher crime levels and further deprivation, we must consider expanding CE for several years, until the worst of the recession is over.
We must also address the issue of people under 25 being on the dole. Nobody under 25 should be on the dole. Perhaps it is all right for people under 25 to be on it for two or three months when between jobs, but not after that. We must create a situation where people under 25 who are not in work are given a guarantee that they will have a position in training or education, but they must also be told that it is not acceptable for them to continue to be on the dole and refuse jobs or the opportunity of training or education. We should have a contract with the approximate 40,000 unemployed under 25 year olds that will ensure they have employment, a work scheme, training or education.
The most important action we can take is to begin the process of restoring competitiveness and to expand the supports for business. There has been no success in this regard during the past six years under the Government. We can do this in several ways. We can freeze Government charges, starting with rates and development levies. We could begin with this from tomorrow. If this year's increases were to be the last ones or if the Government was to guarantee they would not be increased for the next two years, this would give businesses confidence that they would not face an extra 10% or 15% increases over the next few years. We could also do something about utility costs, electricity, water, gas and telecommunications. Another speaker will deal with this in more detail.
We could also invest in infrastructure. We could reverse the cuts in investment in broadband, roads and rail by freeing up the pension reserve fund on a PPP basis, as proposed in the Fine Gael alternative budget. We could also cut back on red tape, as other countries have done. We have a commitment from Government that it will cut back on red tape by 25% by 2012, but have not been provided with any figures with regard to how much it will be cut back by the end of this year or next. It seems we are supposed to wait until 2012 for something to happen in this regard.
We could also reverse the VAT hikes, which were a big mistake and the cost of which will fall on retailers and result in higher unemployment. We could do as ISME suggested and suspend the pay deal. We accept that people earning under €50,000 will need a cost of living increase, but in a time of recession we cannot justify borrowing €1 billion to increase public sector pay. The effect of this would be to increase labour costs for businesses by 6% or 7%, which would only result in further employment. There is nothing to be achieved by a pay deal that causes people to lose jobs.
We also need to recapitalise the banks. The guarantee has brought us this far, but only this far. Ordinary people and businesses large and small have seen their overdrafts cut and they cannot get credit. Credit, as the Minister for Finance said, is the lifeblood of the economy. Deputy Richard Bruton said credit is the oil on the cogs of the wheels of finance. We cannot waste any further time with regard to making the decision to capitalise the banks. While it will be an unpopular and difficult decision, the Government can be assured it will have the support of the Fine Gael Party if it is done appropriately, we get a guarantee of an equity stake in the banks, and they guarantee they will restore credit to business.
We should also consolidate labour law. Currently, we have 17 different labour law Acts. This is too many and results in confusion, creating difficulties for small businesses in particular. An area to which the Government must give attention is the issue of the joint labour committees, JLCs. This is a complex issue, but I know the Minister of State understands it well. We cannot sit back for much longer in a situation where businesses are closing on Sundays because of the requirement for double pay. We are all for labour rights, but labour rights that cause people to lose jobs must be reviewed. I hope the Government does not wait for the courts to solve the problem and that the Minister of State, Deputy Kelleher, will be proactive in dealing with the situation.
Ireland is sliding into an economic abyss, the economy is shrinking, public finances are starting to make Ireland look more like a developing country than a developed one and unemployment is set to soar. This cannot be denied, but all is not lost. There is still hope for Ireland. With real leadership and the right policies, the best is yet to come for the country. The Fine Gael Party will not be content merely to prosecute the Government for its failures, but will also point the way forward to recovery and reform. That is what this motion does and I commend it to the House.
I support the motion. Tomorrow we expect the latest figures on unemployment and expect they will be negative and that unemployment will have soared. Deputy Varadkar mentioned unemployment among young people and I will make further comment on that area. The number of unemployed under 25 year olds is a matter to which the Government should give serious attention. The figures for September 2007 to September 2008 show that nationally the number of people under 25 unemployed has increased by 60%. In Laois and Meath the increase is 95%. This is a startling figure, which probably reflects lay offs in the construction industry where so many young people were employed.
Many of these young people left school to take up a trade that today is no longer viable. Some of them have been on training or apprenticeship courses, but are unable to finish them. We need to focus on this area. Many of these young people probably have no ties, such as a family or house, and will now think of going abroad and seeking employment outside of the country, but we do not want to lose them. We certainly do not want a repeat of the brain drain we had in the 1980s. We want to ensure people like this are identified and offered training that will provide them with alternative employment prospects. They must be recognised and given support. Many of these people could be facilitated by ensuring they can complete their apprenticeship programme.
FÁS appeared recently before the Oireachtas Joint Committee on Enterprise, Trade and Employment and we had a long discussion on this issue. There are opportunities in the UK and it was suggested to FÁS that it could work with young people who have not completed their apprenticeships and secure positions for them to do so there. High levels of youth unemployment are a serious concern, but it is young people who can most benefit from retraining.
FÁS must become more proactive and must anticipate what is coming down the tracks. It must be flexible in its approach and must encourage people to avail of training opportunities. It must recognise what the market needs and demands. It has set up an environmental construction course, but this is already oversubscribed and cannot match demand. This reflects an organisation that is not flexible enough to cope with or adapt to market demand. We know from Sustainable Energy Ireland how many houses will have to be brought up to the standard of the building energy regulations. The potential for significant spending in that area could create employment opportunities but our national training agency is not equipping people with the requisite skills. Beginning in January 2009, all second-hand homes will be required to have a building energy rating before they are sold or rented. Unfortunately, the people who are qualified to conduct the necessary inspections are few in number. This is but one example of how we can and should react by training young people in the skills needed for a changing market.
Fine Gael's motion calls on the Government to review the back-to-education allowance with a view to facilitating people who are not in receipt of jobseekers allowance for 12 months. This requirement is an obstacle and we should provide for flexibility, particularly in respect of low income workers. There is little difference between what one would receive in social welfare payments and the minimum wage. It would make sense for many people to return to education, provided they have the inclination to upgrade their skills.
It is important that the Departments of Enterprise, Trade and Employment and Social and Family Affairs communicate with each other. In September, my help was sought by a woman who had secured a place on a VTOS course but was not entitled to the back-to-education allowance because she had formerly worked at home looking after four children. As the youngest child had started school, she wanted to avail of the opportunity to upgrade her skills and improve her employment prospects. However, she is required to receive social welfare payments for 12 months before she can take up a course. That is ludicrous. The back-to-education allowance should be available to people who want to improve their prospects. It can be adapted to facilitate these people at no real cost to the State because they are already being paid other social welfare benefits.
As previous speakers have noted, tomorrow will see the publication of new live register figures. I doubt anybody expects good news, given that the number on the register has increased by almost 50% in the past 12 months. The ESRI now predicts unemployment to reach 8% in 2009. That is a conservative estimate compared to the many others who predict that the figure will be closer to 10%. Ireland is entering into a painful and difficult period in which tens of thousands of people will have to cope with losing their jobs.
A combination of reckless Government spending, gross economic mismanagement of public funds and denial for too long of the severity of the situation, combined with an international bank liquidity crisis, plummeting consumer confidence and the collapse of the construction industry, have created in Ireland what many describe as a perfect storm. At times like this, people expect the Government to provide leadership and a steady hand on the tiller as it plots a course through an uncomfortable period. It is, therefore, reason for worry that we are getting neither leadership nor a coherent plan to lead Ireland through its recession. The budget was supposed to be a strong statement of new thinking and hope for people who recognise the depressing nature of the next 12 to 18 months. However, instead of a decisive budget setting out a clear path, we were given little more than a discussion document that changes by the week and lacks any clear plan.
Governments in times of recession should have two priorities. First, they should protect existing jobs while creating new opportunities for those who are made unemployed. Second, they should protect the vulnerable because in difficult times the State is the safety net and the last resort for many. We have spent the past several weeks pointing out the Government's failure to protect the vulnerable in the budget, and this evening we are focusing on job protection and creation. Where is the Government's plan for economic recovery? What is it doing to protect jobs? It appears at present that it is up to the Opposition to devise strategies and plans for job creation and protection.
In regard to small and medium sized enterprises' access to funds and credit, the Government's amendment to the motion congratulates the Government on stabilising the financial services sector so that Irish enterprises have improved access to funds. The reality is that many businesses, particularly small ones, simply do not have any such access. If we leave them to struggle to exist in the current environment, many will not last beyond the next four months because they cannot get overdrafts, never mind modest loans. The Government needs to put in place a strategy for recapitalising our banks to free up more money. It took the right decision on the bank guarantee scheme, and the Opposition supported it, but we cannot sit back on our laurels when the job is not yet finished. Companies are going out of business because they can no longer access basic funds. We have the choice of looking at mergers and acquisitions in the hope of freeing up capital, taking equity stakes in banks or seeking private investment from abroad, which is what Gordon Brown attempted in his visit to the oil rich states. However, we do not seem to be taking any of these options. That is the reason for the level of frustration with the Government's performance in this area.
In terms of the impact of the budget on funding for local authorities, I urge the Minister of State to emphasise to local authority managers the importance of not increasing rates and development charges. The private sector simply cannot shoulder that burden.
Let us hear some strategies for the green economy. We are given generalised statements on the opportunities provided by the green economy but the details are missing.
I commend my colleague, Deputy Varadkar, on moving this motion. Unemployment is affecting many people, both young and old, in every community. The harsh reality of unemployment is a cause of concern to everybody, including the Government. Last week alone, 700 temporary jobs were lost in Limerick city, with profound effects on parts of my constituency. Tipperary town has one of the highest unemployment rates and is one of the most disadvantaged towns in the country, according to statistics. There is real worry in the area with regard to Dell. I do not want to be a prophet of gloom but the Government has a clear responsibility in respect of Dell. If anything happened, there would be a major effect on the economy of Limerick, Clare, south Tipperary and north Tipperary.
There are major problems. The uncompetitiveness in the economy and the inability of the Government to keep costs low show what is lacking. I refer to the inability to provide better essential infrastructure, transport and communications. Broadband in smaller villages is so slow that it is unbelievable. Last week the Minister for Communications, Energy and Natural Resources, Deputy Ryan, announced the deferral of broadband to certain areas. That is unfair to many people in difficult economic times.
In South Tipperary the number of unemployed people under the age of 25 has risen by67%. Shame on the Government that unemployment has been allowed to creep up higher and higher, to worrying proportions, while the Government has been busy calling Fine Gael prophets of doom.
We must improve access to training for every person who loses a job or is on the live register. There are various questions about FÁS, which has a great role to play in helping the unemployed. Across the country, many people have been trained by FÁS and we should not forget the impact this has had on our community.
I support the motion. This is an important opportunity for the Government to consider what it must do to get the economy back on track and tackle rapidly rising unemployment. I wish to focus on one part of the Fine Gael motion, the back-to-education allowance.
We have seen consistent losses of employment. On 8 October I outlined the effects on my constituency. Each Deputy is conscious of problems in their constituency. The figure provided by Deputy Varadkar of 720 jobs lost per week brings the issue home. Often, more attention is given to big announcements of a group of job losses but everyday losses are causing serious concern.
The criteria for the back-to-education allowance must be changed, but not in the negative way they were changed in the budget where 500 places on the scheme were lost. They must be changed in a positive way to allow people to participate. The current scheme, which the Government stands over and which the Minister, Deputy Hanafin, and her predecessor, Deputy Cullen, stood over, forces people on to the live register. If one wants to avail of the back-to-education allowance, one must be unemployed for 12 months in most instances. The point about major job losses is that most often in these situations people receive a redundancy package. If there is a small job loss, such as one or two jobs in a shop or restaurant or a local business, the people affected often do not receive redundancy packages. Such people must wait for the full 12 months before obtaining the back-to-education allowance. If one is made unemployed in August or September, effectively one might have to wait a further year before accessing third level education because of the way it falls.
The second case that must be addressed is that of the person on the minimum wage who is excluded from availing of the allowance. This is forcing people on to the live register. On the minimum wage, one earns approximately €346 per week and on jobseeker's allowance, with rent allowance and the medical card, one receives €347 per week, €1 better off than the person on the minimum wage. On the minimum wage, one cannot avail of the back-to-education allowance unless one gives up that job. To encourage people to do that in order to avail of the education system is deplorable and negative. It is driving people into unemployment.
Youth employment must be seriously addressed. The Government has made much of addressing the issue of lone parents and unemployment by providing 50 facilitators who will work on a one-to-one basis, according to the Minister, with all lone parents. When these people wake up tomorrow morning and hear the live register figures they will wonder how on earth this can be done. The Minister is saying that each of the facilitators will deal on a one-to-one basis with 8,000 people, almost a quota in most constituencies. This is impossible and cannot happen. The level of co-operation between the Department of Social and Family Affairs and FÁS is insufficient. The Government must answer questions about the facilitators and the back-to-education allowance.
Last Friday the IBEC director general, Mr. Turlough O'Sullivan, issued a press release to the effect that firms in the private sector are losing jobs at the fastest rate in decades. Reduced competitiveness and increased costs are making it extremely difficult for firms to survive. As Deputy Varadkar said, we are losing one job in this country every ten minutes, 700 jobs per week. This is quite worrying and I think it will accelerate. There could be 350,000 to 400,000 people on the live register within a year if trends continue.
I was in Silicon Valley last March with a group from Tralee to encourage industrialists to come to Kerry. I met the chief executive of the San José Silicon Valley Chamber of Commerce at 8 a.m. There were four delegations before us and a queue after us. People go there from around the world because there is a lot of noise around the Silicon Valley. The Silicon Valley has been very kind to Ireland, giving us Apple, Intel, Hewlett Packard, Sun Microsystems and many more. Now there is much competition and it is not happening.
I met a senior IDA official and asked him the reason. He replied that the task of the IDA is very difficult now. For example, employing someone in Ireland costs $28, but $26 in California and $6 in Poland. As Mr. O'Sullivan said, we have lost our competitiveness. The president of the leadership group is John Hartnett, who is president of Palm. Next week it will visit Trinity College, bringing venture capitalists and industrialists to tell us that they want to help us but that we must become competitive. They will send out a stark message. The Minister for Enterprise, Trade and Employment will meet them but they will give us the message that we will not attract the industry we attracted in the past if we do not become competitive.
It is startling and alarming that the live register total in Kerry in September 2007 was 5,958 and grew to 9,085 in September 2008, an increase of 3,127 or 52.5%. This is unprecedented but is the result of years of neglect by the IDA and other Government agencies. One would swear that Kerry did not exist. For example, the IDA brought 13 itineraries to Kerry over five years. Some of these were for leisure visits to play golf and give the impression the IDA was sending the odd itinerary to Kerry. Shannon Development, on the other hand, put €9 million of its money into creating a technology park in Tralee. What did the Minister's predecessor, the Minister, Deputy Martin, do? He took the brief of promoting industry away from Shannon Development, which was making an impression in terms of achievements. The business centre in Listowel is now full and there is also the technology park in Tralee. The then Minister withdrew Shannon Development's brief in that respect in case it might create any more jobs. One can single out Kerry and point to the reason for the increase in the rate of unemployment. Normally I am fair and balanced and not so political in the points I make in this House. The finger can be pointed at the Government for its inaction and for agency inaction in this respect.
The Minister of State is practical. The message here is stark. Unless we examine our competitiveness, President Obama, on taking office, may examine our advantage in terms of corporate tax in attracting American companies to invest here. We could then be in serious trouble.
I thank my colleague for bringing forward this motion, but it deserves to receive more attention than that of the one Member present on the Government side. That is unacceptable.
Billy Kelleher (Minister of State with special responsibility for Labour Affairs, Department of Enterprise, Trade and Employment; Cork North Central, Fianna Fail)
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I move amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
the increase in the number of people signing on the live register; and
that the Government has taken early action to address the deterioration in economic and fiscal prospects by introducing the 2009 budget early;
supports the Government in:
stabilising the financial services sector so that Irish enterprises, small, medium and large, have improved access to funds, thereby protecting jobs and Irish economic growth;
its management of the economy and employment market to date in challenging global circumstances, which means that Ireland meets the current challenges from a strong position with over 640,000 jobs having been created over the last eleven years and over 2.1 million in employment;
the measures it is putting in place to ensure that those who become unemployed are assisted with employment services and training programmes to help them return to employment;
the retraining of those previously employed in the construction sector;
the additional resources being provided from the National Training Fund for training those who become unemployed, including the measures being taken to help apprentices to complete their training despite the current conditions in the construction sector;
the strong successes that have been achieved in attracting foreign direct investment to Ireland;
the substantial support given to community employment projects, which give people employment experience and assist in their return to the open labour market;
the continued training and upskilling of the workforce in line with the National Skills Strategy by various agencies including FÁS and Skillnets;
the work of the county and city enterprise boards who have a clearly defined role as the principal deliverers of State support to the micro-enterprise sector in Ireland and who deliver targeted valuable assistance, both financial and non-financial, to business start-ups with good growth and employment potential;
and acknowledges that:
the Comptroller and Auditor General has acceded to the Tánaiste's request to review certain activities in FÁS;
the Department of Enterprise, Trade and Employment has begun a review of labour market programmes with a focus on their efficiency and effectiveness;
the FÁS One Step Up Programme and the Skillnets Training Networks Programme include a particular focus on being responsive to the needs of small and medium sized enterprises;
the Management Development Council is currently reviewing the appropriateness of available training for owner/managers in the SME sector; and
the conditions for the back to education allowance have been amended to provide immediate access to the scheme for people who are awarded statutory redundancy and have established an entitlement to a social welfare payment and notes the increased participation in this scheme."
I wish to share my time with the Minister of State, Deputy McGuinness, and Deputy Dooley.
Billy Kelleher (Minister of State with special responsibility for Labour Affairs, Department of Enterprise, Trade and Employment; Cork North Central, Fianna Fail)
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I welcome the opportunity to speak on this issue. As outlined, it has been raised on a number of occasions, which shows the strong views of Members on all sides of the House on this issue and the level of concern in terms of the challenges we face.
It is appropriate that we take account of the backdrop to our economic position and recognise from the outset that these challenges are faced by virtually every other modern economy in the world today. We have all been affected by the major downturn currently gripping the world's economy. How we respond to this downturn will determine our future and the Government is determined to continue to take the necessary steps to ensure that Ireland will overcome these difficult circumstances.
However, we must acknowledge that, as a small open economy, Ireland is particularly prone to the effects of the economic challenges unfolding across the world's financial markets. The worldwide economic difficulties are producing effects of a range and severity that are unprecedented in modern history. The world financial system is currently experiencing an ongoing period of rapid transformation and the fluctuations taking place are impacting on industry, enterprises and individuals not only in Ireland but throughout the world.
Difficult and decisive action needs to be taken to ensure economic stability in these tumultuous times. The Government recognised this fact and brought forward its budget by six weeks in recognition of the extraordinary circumstances facing us — the challenges we face require an agile response and a willingness to be flexible in the face of ever-shifting circumstances.
The Government has a proven track record and the experience necessary to manage the economy during this challenging period. We have proven ourselves by managing the economy to record levels of growth and expansion during the past decade. We have been at the helm of the economy during a period that witnessed a remarkable leap in living standards for most citizens, which now exceed the EU average at a time when we have record levels of people in employment. The Government has managed the economy in a way that has built on our inherent strengths, namely our highly skilled and flexible workforce, our work ethic and our benign business environment.
We will continue to manage the economy in a manner that ensures we protect and sustain the success and prosperity we have created during the past ten years. The Government has displayed the courage and conviction to make difficult decisions in the interests of the State. We will continue to take decisive action that will safeguard our competitiveness and that are in the interests of citizens. That is why the Government is determined to do all in its power to tackle rising unemployment, which is of great concern. As politicians, we all recognise the impact unemployment can have on an individual, a family and a community. New live register figures will be published tomorrow and they will almost certainly show a further deterioration in numbers in employment.
The unwelcome conditions in the labour market here reflect the current international economic downturn and Ireland's openness to events affecting the global economy. We have been adversely affected by the lack of confidence in the world economy, which is manifested in the dramatic fluctuations in stock markets across the globe and the severe reduction in credit, which is the lifeblood of businesses.
I take the points raised by some Deputies opposite in the context of credit being made available to small businesses. As I said during a debate in the Seanad, there is a new arrangement in place between the Government, the Oireachtas and the people of Ireland in the context of the banks because of the bank guarantee scheme. Banks are strategic in ensuring that credit, primarily short-term credit such as overdraft and current account facilities, is made available to small and medium-sized businesses. It is important that such access to credit is maintained, particularly for the productive areas of the economy. I would be concerned that banks in trying to balance the figures on their balance sheets and ensure they appear correct might target the productive element of the economy, primarily the small and medium-sized businesses. I acknowledge the support from some sides of the House in ensuring the bolstering of our financial credit system to maintain the economy. The other options available would have been catastrophic. We must acknowledge that measure introduced by the Government, with the support of some Opposition Members.
I acknowledge that the number on the live register increased significantly over the summer, with the unemployment rate on this basis reaching 6.3% in September. This represents an increase of almost 50% in a 12-month period. However, it should be noted that the live register is not designed to measure the rate of unemployment because it includes part-time, seasonal and casual workers who are entitled to unemployment benefit.
Employment and unemployment figures are best measured by the Quarterly National Household Survey, the QNHS, published by the Central Statistics Office. In the second quarter of 2008, the most recent quarter for which data are available, the QNHS measured unemployment at 5.2%, which compared favourably with the EU27 average unemployment rate of 6.8%. The employment growth for the year was 0.3% above the EU27 average and we were in line with the EU employment targets set for 2010. However, the Government recognises that the increasing number of people who have been made unemployed represents a major challenge that we must address. Certain sectors of the economy, in particular the construction and manufacturing sectors, have seen a downturn in activity, with consequent increases in unemployment on a significant scale. For the first time in a decade many Irish people are facing a very difficult and uncertain period. The Government has attached the highest priority to assisting these people. We will continue to direct the necessary resources to the employment and training support services, which will provide a helping hand and assist these people in securing other employment as soon as possible.
I realise that rising unemployment levels coupled with the downturn in the economy represent the most demanding challenge which Ireland has faced in almost 20 years. However, the Government has already taken decisive action to respond to the challenges we are now facing. We have shown leadership and sent out a strong message that Ireland is responding to the global economic crisis in a proactive and prudent manner.
We took early action to address the deterioration in economic and fiscal prospects by introducing the budget 2009 budget earlier than anticipated. We have secured substantial savings across virtually all areas of public expenditure and we will continue to seek additional savings were possible. The Government has made many necessary tough decisions in recent weeks in order that Ireland is placed in a position to reap the benefits that will arise once our economic situation and that of the wider world improves.
We should acknowledge that total investment for labour market programmes in my Department's Estimate for 2009 will amount to more than €1billion, or 56% of the total budget. Of this, €1.05 billion will be delivered through FÁS. Within the FÁS budget funding for community employment and job initiative schemes will be increased by 2% to €450 million. This will enable FÁS to continue to support a minimum of 22,500 participants on these programmes next year. Funding for FÁS services to people with disabilities is also being increased by 2%. A total of €77.7 million in 2009 budget for FÁS is ring-fenced for specific employment and training programmes for people with disabilities. The allocation from the national training fund for training the unemployed has been increased by €9.5 million this year to more than €208 million. This allocation will help workers who have recently lost their jobs, including redundant apprentices, through training and re-skilling. While labour market programmes have been refocused to assist the unemployed, funding for upskilling those in employment in 2009 will still amount to €168.5 million and will be delivered primarily by FÁS and Skillnets.
The additional allocation in budget 2009 will enable FÁS to develop new initiatives in addition to the normal delivery of its employment services and training supports to the unemployed. The purpose of these supports is to assist individuals in securing alternative employment either through sourcing possible employment opportunities or by providing them with upskilling opportunities that will increase their potential employability. In addition the Department of Social and Family Affairs and FÁS are working closely together to respond quickly to the rising live register numbers. In particular FÁS's employment services and the local employment services are gearing up to provide increased capacity for an expected increase in referrals from the live register. FÁS is also providing a range of certified and flexible programmes designed to upskill redundant workers so that they can enhance their prospect of securing employment. A number of programmes are already in place and the frequency and range of these will be expanded over the coming months.
I have already mentioned the significant downturn in construction-related activity since the start of this year. The construction sector is undergoing a major structural change at present and as a result there has been a major increase in the numbers of people within the construction sector who have been made redundant. There has also been an increase in the number of apprentices being made redundant. FÁS, in addition to the usual supports it provides to redundant workers, has established a training fund to enable it to provide a timely response to identified training and retraining needs for low-skilled and redundant craft workers from the construction sector. It is intended that this will enable individuals to secure a speedy return to work, or where this cannot be secured to provide relevant upskilling opportunities in order that the jobseekers can secure employment in alternative sectors.
It is also focusing on providing retraining opportunities for redundant construction workers in emerging areas such as the installation of energy efficient and renewable technologies, environmental activity, and compliance and regulatory work as was mentioned by the Deputies opposite. In addition FÁS is assisting individuals in any way it can in securing employment abroad in construction in other EU countries. In that regard FÁS has held job fairs in Dublin and Cork, which brought many employers from other EU member states offering employment in their construction sectors.
My Department and FÁS have been actively examining the issue of redundant apprentices and have put in place a series of actions to facilitate redundant apprentices in completing their studies. These include allowing redundant apprentices to progress to their next off-the-job phase of training without having to do the next on-the-job phase. A register of redundant apprentices has been established in order to identify these people at the earliest possible time and FÁS has prioritised the need to locate an employer to sponsor the completion of the apprentices' off-the-job training. A proportion of the additional €9 million assigned to FÁS to provide supports for people seeking employment has been provided to enable FÁS to develop a specific programme aimed at assisting redundant apprentices. It is intended that this programme will facilitate redundant apprentices in securing the much needed on the job experience they require in order to continue their apprenticeship.
Further help for those who have become distanced from the labour market for some time and who are seeking to re-enter is provided by the community employment scheme. Community employment is an active labour market programme designed to provide eligible long-term unemployed people and other disadvantaged persons with an opportunity to engage in useful work within their communities on a fixed-term basis. The programme helps unemployed people to progress to the open labour market by breaking their experience of unemployment through a return to work routine and assists them in developing both their technical and personal skills. The Government is investing €377 million this year in community employment with a view to maintaining overall numbers on FÁS schemes at 2007 levels. At present more than 22,400 people are employed on community employment schemes nationally. In delivering these places, FÁS operates flexibly in the management of this allocation in order to maximise progression to the labour market while at the same time facilitating the support of community services.
While we must continue to provide the necessary supports and services to the people within our workforce who most require our assistance, we must not forget that the continuing development of Ireland's education and training systems will be pivotal in helping Ireland overcome the challenges we are facing and in sustaining our economic success in the future. We must ensure that our education and training systems continue to harness the collective skills and talents of our workforce. We must ensure that our systems are meeting the changing needs of society from both an economic and social perspective. It is of paramount importance to continue to focus attention on developing the skills of our population, so that the Irish labour force can continually adapt and upgrade its skills to meet emerging opportunities and challenges. The flexibility of our workforce must remain a key strength in these difficult times.
This evening's motion calls for a comprehensive audit of FÁS to ensure that the taxpayer is getting value for money from the agency. There are two points I would like to make in response. A review, funded by my Department, is investigating how to ensure value for money and obtain the maximum benefit from the operation of labour market programmes provided by both FÁS and Skillnets. As well as analysing the FÁS and Skillnets-run labour market programmes, the review will also draw conclusions about the adequacy and balance of resources in the context of current and future labour market policy challenges, including the national skills strategy. The steering group conducting the review is chaired by a senior official from my Department and includes members from the Departments of Finance, Social and Family Affairs, and Education and Science. FÁS and Skillnets are also represented on the group which is supported by Forfás.
Set against what is an undoubtedly tough global economic background, a number of key labour market challenges face the country. The implementation of the national skills strategy, which sets out clear long-term objectives for the lifelong learning of those in employment and for developing Ireland's human capital through upskilling, training and education for the period to 2020, is intrinsically linked to the future economic prosperity of the country. Over the two days of the debate Deputies will refer to other issues mentioned in the motion. I commend the amendment to the House.
John McGuinness (Minister of State with special responsibility for Trade and Commerce, Department of Enterprise, Trade and Employment; Carlow-Kilkenny, Fianna Fail)
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My Department and its agencies will play a vital role in working through the current economic circumstances to ensure we are well positioned to reap the benefits that will undoubtedly arise when global markets improve. We will do this by continuing to attract foreign direct investment, by helping Irish businesses to develop and increase exports, by continuing to prioritise investment in science, technology and innovation, and by continuing to provide supports to small businesses.
In speaking about exports, I recognise the role played by Enterprise Ireland and in recent times by the 180 business people representing 94 companies who visited China on a very extensive trade mission. Their generating of €160 million worth of business is an indication that within those markets our Asian strategy is successful. It is an indicator to other Irish companies that in spite of the issues raised about competitiveness in our economy, we have the ability and resources to continue to make our impression on companies far abroad. The Chinese market is very important to us. I encourage companies to take a leaf out of the books of those engaged with Enterprise Ireland and to try to expand their companies in the context of internationalising and commercialising their products and services to ensure they are included in the development policy of Enterprise Ireland in those markets.
The Minister of State, Deputy Kelleher, has stated we will continue to provide the necessary support services and retraining opportunities to assist those who have been made unemployed in this difficult time. By providing these services it is our intention that people who have recently been made unemployed will be given every opportunity to reskill and to secure alternative employment as soon as possible.
The Government will continue to take whatever steps are required to safeguard the economy. Based on our decisive actions we have stabilised the financial services sector so that enterprises, small, medium and large, have improved access to funds, thereby protecting jobs and Irish economic growth. I am aware of some of the continuing difficulties that smaller companies, including those that have invested heavily in property and other businesses, are having with banks. We need to continue to monitor the area to ensure the funds needed to allow companies to continue to trade and grow are secured by them. It is an ongoing developing situation of which the Government needs to be conscious. All our efforts will need to be put into that sector to ensure they have access to those vital funds.
The current economic turmoil that is affecting the entire world economy is obviously having a serious impact on our economic performance. However, despite witnessing some of the most dramatic changes in the world's financial markets, Ireland's SME sector continues to make an important contribution to our economic prosperity. More than 250,000 small businesses operate in our economy and employ approximately 800,000 people. The Government recognises the importance of SMEs. Given ongoing economic difficulties throughout the world, the role of SMEs is becoming increasingly important. The Government is committed to ensuring that we put in place policies and programmes that encourage the emergence of new business creations and facilitate long-term business survival.
Our tax system is one of the most supportive of business in the world and we dedicate significant Exchequer resources to the promotion of research and development. The introduction of the better regulation programme to tackle regulatory burdens, particularly those faced by the business community, is intended to provide a supportive environment for small businesses. The Government has adopted new strategies to support the entire enterprise sector, including small business, based on the reports of the Enterprise Strategy Group and the Small Business Forum.
There is no doubt that future prosperity will be founded on the development and growth of Irish-owned companies. This vision can be realised if the challenges faced by enterprise are met head-on. In this context, the development of the strength and depth of our indigenous sector will be critical if we are to return to the levels of prosperity achieved in recent years. In this regard, the Government has already taken concerted action to assist businesses in succeeding in the ever-increasing competitive environment in which they operate. We have established the Management Development Council, MDC, increased support for the county and city enterprise boards, CEBs, and created an almost seamless support mechanism through Enterprise Ireland and the boards by ensuring that the former is addressing policy and the boards' direction. In budget 2009, we introduced new tax relief measures specifically aimed at assisting new start-up companies, we are continuing to tackle red tape and reducing it wherever feasible and we are promoting increased entrepreneurial activity.
Arising out of the final report of the Small Business Forum and its recommendation that management capability in business be raised to best international standards, the MDC was established last year. The council's membership is drawn from the key stakeholders in the provision and usage of management development training and is chaired by Professor Frank Roche of UCD. The work of the MDC has two main strands. First, it will benchmark Ireland's current management development provision, determining whether it meets the requirements of SMEs, identifying any gaps and developing action plans to address them. Second, the council is charged with developing a co-ordinated approach to building appreciation in the SME sector for the value and need of leadership and management skills.
I look forward to receiving the MDC's report next year. It is clear it will be key in assisting us tailor our management development training to the precise needs of business. This is vital, as I strongly believe that management development training is an issue of importance for enterprise development policy. Research shows that the benefits of management training are not restricted to the individual manager or enterprise.
High-growth SMEs are large net job creators and significant drivers of economic growth. By enhancing and further developing the managerial skills of small firms, all of us stand to gain. It is in the interests of the State, employers and employees to ensure SMEs have access to world class management development training. Given the global market in which Irish companies must compete, access to high-quality management development training is no longer an option. Rather, it is a necessity. I am confident that the MDC's findings will find many positives in our existing provision of services to the SME sector.
The county and city enterprise boards have a clearly defined role as the principal deliverers of State support to the micro-enterprise sector. As a result of their strong regional presence, they are well placed to help micro-enterprises deal with changing economic circumstances. Through the provision of both financial and non-financial support, the boards have assisted many micro-enterprises in developing their growth and export potential as well as bringing them to a stage where they have sufficient mass to access the services of Enterprise Ireland. It is my intention in working with the boards and Enterprise Ireland to ensure the seamless transfer of businesses between them. SMEs will view this seamless organisation as clear support for them in accessing new markets, growing and realising their full potential.
Last month, the Government further illustrated its commitment to supporting small businesses by announcing in the budget that supports, through the county and city enterprise boards, will increase next year by almost €3 million, or 9%, to €34.8 million. This is recognition and support of the boards, which have developed a structure capable of generating and tapping into enterprise at local level. The 2009 allocation for the CEBs recognises the importance of continuing to promote entrepreneurship at this time.
The SME sector is critical to the development of the economy. I will continue to do my best to bring my business understanding to bear on the policy direction taken in the promotion and development of the sector.
I support the Government's amendment. It is important that we recognise the difficulty facing the Government and the entire political system in trying to manage the economy at this time. The downturn is evident across the world. In particular, the stock market and financial market meltdowns are creating unprecedented difficulties for administrations.
Clearly, a small open economy like ours will suffer the ravages of unemployment at a much quicker rate than larger economies. Therefore, the Government has been required to take decisive action more quickly than other nations. It should be commended for doing so. The Government has recognised the need to address the issue by first bringing forward the budget and subsequently putting in place the bank guarantee scheme, which is viewed throughout Europe as successful. This is not to suggest that this or another Administration will not need to recapitalise banks at some point, but that is for another day. The necessary decisive action has been taken and has shown the markets and the wider community that the Government is prepared to take tough decisions.
The country faces serious challenges, particularly in terms of the increase in unemployment. A number of factors are involved. The Government's strategy for attracting foreign direct investment and its support for indigenous industry are important planks of the overall strategy. The agencies with responsibility — the IDA and Enterprise Ireland — are working well in a difficult global environment.
We must refocus our relationship with Europe. I do not wish to rehash the Lisbon treaty debate. However, if we have learned anything in recent months, it is that remaining at the centre of the European project will be vital for the economy. Many sectors in society should be mindful of the difficulties encountered by Iceland in light of the stance they took on the Lisbon treaty. Our continuation at the heart of EU decision-making is vital if we are to ensure the underpinning of employment. It will allow us to grapple with an international crisis.
I welcome the reference by the Minister of State, Deputy Kelleher, to the need to deal with redundant apprentices due to the sudden change in the construction sector. Many people who had legitimate expectations of finding employment in Ireland are in difficult positions because they will not be able to travel to other countries to take up gainful employment. It is important that they find methods to finalise their apprenticeships so that they will be able to find meaningful employment, whether in other countries or in Ireland when the building boom resumes.
The community employment schemes, which have been a central part of the FÁS programme, are vital and should be supported.
I will conclude on today's announcement by the Government regarding the Leader programme. The Leader programme injects approximately €14 million into my constituency by way of various projects. This funding is vitally important in sustaining rural communities, assisting in the growth and development of small businesses and the development of tourism projects which will bring a level of economic success to those regions.
I will begin with a quotation from the Department of Enterprise, Trade and Employment report entitled Innovation in Ireland published in 2008:
Ireland's ability to build and sustain its innovation capacity depends on developing and maintaining our skills at world-class levels, and on high quality, continuous education. Individuals need to respond to the increasing pressures of globalisation by embracing a culture of life-long learning and employability;...
I repeat the second sentence: "Individuals need to respond to the increasing pressures of globalisation by embracing a culture of life-long learning and employability". I listened carefully to the Minister and it is hard to disagree with what has been said in that one senses there is a proactive approach and a continuation of strategies to maintain employment. However, were I one of the 32,000 plus persons made redundant and thus having to apply between 1 January and the end of this month for assistance under the redundancy scheme, this would not provide me with too much solace.
I know of a particular apprentice — there are hundreds like him — who, even if he wanted, could not return to complete his course because there are no jobs in his particular field. The construction industry has dried up. The proof of this is the current lack of house building. Given these trends, apprentices are reluctant to continue their training.
I know of an apprentice who, having completed his leaving certificate examination in 2006, decided to embark on a few years' travelling. When he returned home he took up an apprenticeship as a cabinet maker but was subsequently laid off. He then decided, given the trends that were emerging, to do a public relations course. When the person concerned, who was in receipt of jobseeker's allowance, approached the Department of Social and Family Affairs in respect of a place on a public relations course he was told he would have to be signing on for 156 days before he would quality for the back-to-education allowance. This is wherein the nub of the problem lies.
I referred earlier to the thousands of people already laid-off and made redundant, many of whom want to get back into the education sphere. I acknowledge the €1.5 billion allocation for FÁS and the investment in SMEs. However, many of the people who previously worked in research and development and high-end IT jobs now want to do MBAs and to upskill but there is no mechanism through which they can re-enter the FÁS or SME framework without their incurring serious economic hardship. These people do not qualify for third level grants or the back-to-education allowance as they are already in receipt of the jobseeker's allowance.
Were I on the opposite side of the House I would be re-examining the demographics of this situation in terms of where the lay-offs have taken place and the educational attainment of those involved. I would also be much more flexible in my approach, which is what the Government will have to be if unemployment continues to rise. A person who is eligible for jobseeker's allowance for 12 months should also be eligible for a back-to-education allowance if he or she wishes to upskill by re-entering the education system.
The 22,500 people currently engaged in community employment schemes do exceptional work. However, many of these people are hampered after a few years by the principle of progression, of which we hear so much. I would also be a little more flexible in respect of the requirement to quit a community employment scheme after a specified period. I would allow for a greater degree of flexibility in terms of permitting these people, where possible, to continue to work in their communities and would pay them the allowances required in this regard. This would help to sustain communities and would provide these people with employment.
There have been lay-offs in a wide range of areas, including agriculture, banking, finance and insurance. A wide array of people will not necessarily fit into the training schemes envisaged by Government. Many people working in the energy, manufacturing, building and civil engineering areas have been laid-off and will not get work any time soon. Many of them were reliant on the construction industry and on the IT sector, in particular the research and development component of the IT sector, an area almost always hit first during a downturn. These people are unable to return to the education system unless they pay for it themselves. While an unemployed single person with savings has a good chance of accessing a third level course, an unemployed person within a family structure will need to put aside every penny to meet his or her family circumstances.
The Government needs to apply some lateral thinking in this area. It does not appear to have internalised the full extent of the problems facing unemployed people in the future. Instead of quoting chapter and verse in this House on that which we know already — one has only to look at the Departments' websites to learn what is being spent — it should bring forth fresh ideas in regard to how our people can upskill.
I acknowledge the investment in FÁS training for installation schemes and so on. It was once said to me that the next boom might result from our having to fix some of the faulty and dodgy houses constructed in haste during the past ten years. It may be that such a scheme will be required. However, we must also cater for high end jobs. We must bear in mind that hundreds, if not thousands, of people are currently unemployed.
We need to look after those people who will not necessarily fit into the mechanism prescribed by the two Ministers in their response. I reiterate the Government's words that individuals need to respond. Individuals want to respond to the changing market and to this downturn. However, they may want to diversify into completely different areas of education. This, for some people, is an opportunity to re-assess from where they come. If we are talking about entrepreneurial spirit in this country, the only way it can be reinvigorated is if the €179 million allocated to Science Foundation Ireland or €90 million spent on encouraging FDI is re-examined and perhaps apportioned at least in part to localised schemes for people who have that kind of spirit and who wish to create indigenous and SME-type industry.
I thank the Labour Party for sharing its slot with me and welcome the opportunity to contribute to this debate. My party has constantly highlighted the need for training in the last two years as it became apparent the economy was contracting and job losses were on the rise. Even before the current economic crisis, we had pointed out that the construction industry in particular was heading for a crash and the State risked massive unemployment unless it started training workers in that sector in alternative industries. Unfortunately, none of these calls was heeded and we see the consequences now.
It is imperative in the next few months that we see jobs created. It is not enough to have a highly trained workforce if it has no means of employment. The 2009 budget failed spectacularly to produce a strategy for job creation in the time ahead. It was a book-balancing exercise for Fianna Fáil based on the contracting revenue brought about by job losses, but nowhere did it set out a plan for creating jobs to increase revenue. If anything, the budget included measures that have the potential seriously to curtail employment. The small to medium business sector which employs the majority of Irish people is going to the wall in the current economic crisis and instead of introducing measures to help, the budget undermined it.
The increase in VAT will have a serious impact on consumption in this State if it is passed onto the consumer. If it is not, and these businesses subsume the increase, it will have a serious impact on their ability to operate. Either way, an industry dependent on domestic consumption was targeted in this budget to raise finances and cover the fall-out from the Government's short-sighted economic policies. Ironically, one area of the budget where the Government gave money away — to the tune of €180 million — was stamp duty. However, the move is more a sop to developers trying to shift current properties than a plan to keep jobs in the construction sector.
I wish to deal with the jobs fall-out in this sector first because although many other areas, such as manufacturing and the SME sector, are feeling the squeeze, construction is where we are haemorrhaging jobs. As the Fianna Fáil-led Government came to power in 1997, employee numbers in the industry soared from fewer than 100,000 in 1994 to 260,000 in 2007. At its peak, construction accounted for almost one quarter of all economic activity. The growth of this unsustainable sector was pushed by Government policy of property tax reliefs and support for its developer friends. The indirect taxation that resulted for the Exchequer was an added bonus and acted as a deterrent to the Government in doing anything to rein in the sector.
As a result of its growth, thousands of young men headed on to sites and into apprenticeships. Many left school early and others left other industries like farming to the detriment of those sectors. It is estimated that a minimum of 30,000 construction workers have lost their jobs so far in 2008. This figure comes from CSO projections based on live register data and we do not have exact figures on how many construction workers have emigrated. In offering training to those leaving this sector or at risk of losing their jobs, it is imperative the State takes an intelligent approach. We should not be training for training sake — we must train these individuals in skills we need and which will be of real benefit.
This leads to my point about FÁS. Leaving aside the issue of financial irregularities in our largest training agency, something which of course must be dealt with in full, my main concern regarding FÁS is the type of training it is providing for those out of work. There does not seem to be any joined-up thinking or plan behind at least some of the courses offered by it. For example, two of the courses launched by FÁS in recent times, or in development, include domestic heat pump installation and floor covering installation, both potentially useless courses given the downturn in the related construction sector.
It is essential the State introduces a specific back-to-education scheme for construction sector workers under 25 years of age and without leaving certificates. The Taoiseach's Department estimated that under-25s represent over 50% of the total construction unemployment figure in 2007 and 2008, and a large majority do not have a leaving certificate.
It is also essential that training and upskilling courses for alternative industries to construction be provided. Where possible, workers should be retrained in areas they would be comfortable with and which we are also trying to expand, such as energy saving and renewable energy sectors.
As I mentioned previously, it is not just in construction where people are losing jobs and a raft of new training courses will be needed in the months ahead to sustain the significant numbers signing on. I call on the number of community employment schemes, in particular, to be increased, and for the schemes to be reviewed in terms of the training they provide and the merit they bring to society. It is also important that training courses are provided with a view to our underperforming indigenous export market. It is completely unacceptable that 90% of exports in the State are from the foreign direct investment sector, welcome and all as it is, with only 10% from the indigenous sector. It is grossly unacceptable but this should have been planned for many years ago in order to see fruits now. It is an indictment of Government policy over all those years that action was not taken on indigenous exports.
Five years ago, Ahead of the Curve identified problems with the sales skills of those working in the export sector. The report noted a scarcity of sales personnel with the right mix of industry background and technical knowledge, that Irish market graduates are perceived by the industry to lack practical business skills and that only 25% of sales personnel in Irish SMEs have formal qualifications in marketing sales. This skills deficit must be tackled soon.
It is important to mention the child care sector, which is very neglected by this Government. When workers lose their jobs, it is incumbent upon the State to ensure they can avail of training and upskilling opportunities. However, we must be aware that the difference in income between someone employed and someone in training is vast, and if that individual was previously dependent on our very overpriced and underresourced child care sector, a problem arises. These people cannot continue to keep their children in expensive facilities, so who minds their child when they are receiving training?
The equal opportunities child care scheme, while not nearly broad enough, traditionally stepped into this breach for people who were either unemployed and seeking work, in training, or in low income jobs. The decision of the Government to do away with the scheme and replace it with a less effective one further decreases the number of affordable child care places available. Given the lack of child care, which has acted as a handicap to our workforce even in times of near full employment, I suggest the Government concentrate on this sector for both training and job creation. I also ask the Government to reverse its decision on the equal opportunities child care scheme.
The need for training will grow in the coming months but I reiterate my initial point. As well as providing training and upskilling, the Government urgently needs to produce a plan that will create jobs. The public finances simply are not there to sustain significant numbers in training for any length of time. In order to turn around our economy, we must develop jobs very quickly to offer people an alternative when they become unemployed.
With regard to child care facilities, I appreciate there is much capital expenditure normally involved in the establishment of such projects. Perhaps some schools with enough available land could have child care facilities within them, thus encompassing an environment that will be comfortable for the child through its early education. That is one avenue of reducing capital costs and the cost of child care, which is very important.