Leo Varadkar (Dublin West, Fine Gael)
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Question 31: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if she will make a statement on the proposed job subsidy scheme which is proposed to form part of the national recovery plan; the type of companies to which it will apply; and the way it will be funded. [27946/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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The Government is working on the detail of a temporary employment subsidy scheme, the purpose of which will be to help the economy retain its productive capacity and help employers to retain the labour, knowledge and skills of the workforce, thereby supporting a faster return to sustainable growth; help employees to retain their jobs; and ensure that economic and fiscal stability is promoted by avoiding the costs of unemployment, including statutory redundancy payments and the longer-term cost of social welfare.

It is proposed the scheme will involve paying a subsidy to firms to retain a person in employment who may otherwise have been made redundant.

The scheme is intended to apply to companies in the manufacturing or internationally traded service sectors that are currently engaged in exporting. In addition, in order to qualify for support it is intended that a company must not have been in difficulty on 1 July 2008, and a financial assessment must establish that it is now facing such difficulties as a result of the global and financial economic crisis that redundancies are likely to have to be considered within 12 months. It is also intended that a company must also be judged to be viable and capable of growth in the medium term to receive support under the scheme.

Leo Varadkar (Dublin West, Fine Gael)
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I thank the Tánaiste for her answer. I have a number of questions, my first being whether the Tánaiste would be prepared to publish the draft proposal she is making. I have heard it talked about in this House, by Ministers and the Taoiseach in the media, and we know it is being discussed with the social partners. It is certainly being discussed in the media as well. It would be appropriate at this stage and would show respect for the House and for the Opposition if the Minister were prepared to publish the draft of her proposal so that we may all see what is proposed and the potential consequences.

How will Tánaiste assess which employees would "otherwise be made redundant"? An employment subsidy regime can have a huge deadweight effect if it subsidises jobs which are not in danger. In such cases there is cost to the taxpayer but no jobs are saved. There is also the danger that subsidising a business which is in trouble will simply displace jobs from another business which may be equally in need of subsidy.

Mary Coughlan (Donegal South West, Fianna Fail)
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I will not be in a position to publish the draft proposals as I must first bring them to my Government colleagues. They will then be made available to the public.

It is proposed that the scheme will be administered by Enterprise Ireland, which has considerable experience of the stabilisation fund and the criteria set down for it, which are deemed appropriate. Those criteria will deal with the issue of deadweight, to which Deputy Varadkar has referred. It is not my intention that companies in the scheme will not be viable. Qualification will be based on viability and on opportunities, particularly for exporting, which will be available to these companies when the market returns to where it needs to be. The assessment will be based on the criteria set down by Enterprise Ireland and by agreement with a national monitoring committee, which will be set up to assure taxpayers and the people involved in the scheme that it will be working and that it is the right thing to do.

Leo Varadkar (Dublin West, Fine Gael)
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It is interesting that the Tánaiste referred to the enterprise stabilisation fund. The proposal, as she outlines it, is similar and will assist the same sort of companies as are already assisted by the enterprise stabilisation fund. That fund is only barely in existence and it is too soon to know whether or not it is effective. I am concerned that the Government is basing a new scheme on one which is only a few months old.

I understand the new scheme will cost approximately €250 million, coming from the surplus in the training levy fund, and will only benefit exporters in the manufacturing or internationally traded sectors. Given that the scheme is restricted to that sector, only a small number of workers will benefit from it. People in construction, services, retail and other sectors will not benefit. Only a small number of business and workers will benefit but all workers and businesses will have to pay. Could that €250 million not be more effectively used to do some of the things Fine Gael has proposed, such as reducing both rates of VAT, abolishing the travel tax and introducing an exemption from employers' PRSI for employers who take on new staff? Such a measure would benefit all businesses, consumers and workers and would save more jobs. The Government's targeted subsidy approach will only benefit a small select area.

Mary Coughlan (Donegal South West, Fianna Fail)
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I am disappointed to hear the Deputy, once again, oppose many of the Government's proposals.

Leo Varadkar (Dublin West, Fine Gael)
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When the Tánaiste publishes her proposals I will tell her whether or not we oppose them. She will not publish them.

Mary Coughlan (Donegal South West, Fianna Fail)
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The proposals deal with the sustainability of the many enterprises we have and where we will have opportunities to sustain and grow employment. The targeted group consists of approximately 3,600 agency listed clients involving almost 300,000 people. It includes ICT, food, chemicals, medical devices and many others. It is important that we target these industries where there are specific opportunities.

Leo Varadkar (Dublin West, Fine Gael)
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It is only 10% of the economy. What about the other 90%?

Mary Coughlan (Donegal South West, Fianna Fail)
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Many other proposals are being worked through other parts of the economy. This is only one part of the solution to the difficulties we face. There is a suite of Government proposals, including pilot schemes which we hope will work out well. Pilot schemes such as the graduate placement programme and the training initiative for people in part-time work, which was proposed by the Labour Party, need to be evaluated. I hope they will prove successful. I also hope the new job subsidy scheme will work. The feedback from the stabilisation fund has been nothing but positive.