Dáil debates

Wednesday, 29 September 2010

9:00 pm

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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I move:

"That Dáil Éireann, noting with concern that since the Taoiseach took office:

the number of people on the live register has more than doubled bringing the total number on the live register to a record 466,923;

over 100,000 people have emigrated;

GNP has declined by 20% and the Irish recession has been deeper and longer than that of any other EU country;

Irish borrowing costs have increased dramatically, reflecting the growing lack of international confidence in Ireland's economic strategy; and

the Government has failed to present a coherent jobs strategy;

calls on the Government to steer Ireland away from economic disaster by putting jobs at the centre of a new confidence-building economic strategy, in particular by:

using the National Pensions Reserve Fund, private pension funds and sales of nonstrategic State assets to accelerate the investments in high speed broadband, clean energy and water needed to make Ireland a better place to do business and to create jobs;

cutting employers' PRSI rates for the low paid;

scrapping the travel tax and reducing airport charges as part of a deal with the airline industry to expand services and increase tourist numbers;

providing partial loan guarantees for small and medium sized enterprises;

publishing an action plan for implementing the recommendations of the National Competitiveness Council and the Competition Authority in order to drive down costs in the economy;

slashing unnecessary red tape for small businesses;

providing second chance education and traineeship positions for unemployed young people; and

encouraging entrepreneurship by overhauling our outdated bankruptcy laws."

The Leas-Cheann Comhairle knows as well as any Member that we face an appalling jobs crisis. In the space of the last two years, we have lost a quarter of a million jobs and this decline has not yet halted. As more than 80% of those who have lost their jobs are under the age of 30, this constitutes a really serious blow to our young labour force. Moreover, recent days have witnessed the huge emergence of emigration as a factor affecting Irish people. The emigration level of young Irish people has doubled in the last two years. It shortly will be the equivalent of the entire cohort of young people coming out of school and college leaving the country each year. These are the people who have been abandoned by the lack of an effective employment strategy from the Government. These are the very people who we should be nurturing because they will be the building blocks of the economic recovery we must build. Instead, they will be building the economic futures of Australia, Canada and other far-flung places. This represents an enormous challenge to this State.

I do not pretend that Ireland does not have huge fiscal and banking crises that threaten our very economic survival as they undoubtedly exist. However, if we view the solving of those two problems as being the goals of policy, we shall fail. The goal of policy must be about fixing people's lives and what has gone wrong with the lives of those who have been so disrupted by this crisis. The banking and fiscal problems are real and are constraints on what we can do about the challenges to fix people's lives. However, they are not the goal of policy. While people will recognise that they are real constraints, they do not render us powerless. Sadly, however, that has been the feature of Government thinking with regard to the jobs crisis. It has felt itself to be powerless and is obsessed with dealing with the banking and fiscal problems and has not yet focused on the need for a job strategy, which is the only key that will bring together all those problems with some chance of success.

Had the Government adopted the budgetary approach put forward by Fine Gael last year, which was fully compliant with the €4 billion in savings that needed to be made according to the agreement with the European Union, 50,000 more people would now be gainfully occupied in this economy than is the case at present. This would be a highly significant change and boost to confidence. More than 10,000 of them would be engaged in laying out infrastructures such as a smart electricity grid, a decent water system or decent broadband. Another 10,000 would still be with the employers who otherwise would have let them go because of the work sharing proposals that Fine Gael proposed to stop employers from thinking of redundancy as the first option in a recession. Another 10,000 would be recruits as a result of cutting the labour costs arising from the PRSI system associated with taking on an employee by 3% and a further 20,000 would have been young people engaged in work experience or re-skilling. All of the proposals were possible to implement and we fitted them within the budgetary constraints. It is not that we are powerless to address these problems but simply that the Government's priorities have lain elsewhere. I am not pretending either that the choices we made are easy. They require forcing changes in the way we manage the money we have at our disposal. They would not be comfortable for people who are quite cosy with the existing arrangements but unfortunately the world has changed dramatically and we must change with it. The Government has failed to recognise that unless it has a credible job strategy, all the rest of its efforts will be set at nought.

As a community, we really do have big choices to make. They will determine whether we create a successful future or we will spend all our time trying to shore up the mistakes of the past. The tragedy of economic policy in the past 18 months to two years is that it has been all about trying to nurse along the failures of the past instead of trying to create a better future with employment creation.

In the banking crisis, the policy has essentially been all about nursing along the bad loans of the past and, in the process, starving new businesses of credit. All recruitment to the public service has been stopped but the Government has not reformed existing work practices. The Government has shied away from doing so. We have raised taxes and cut pay but we have not streamlined the very system of government itself, which represents the future. We have slashed investment in infrastructure at the very time when it is required. We are told time and again by the National Competitiveness Council that the core problems are that broadband is not adequate and that electricity and waste disposal are too expensive. The list goes on. All the problems are key infrastructure problems.

We have cut the rate of social welfare but we have not removed the traps that stop people from fulfilling their potential. Now is the time in which we must radically reform the way we proceed in order to give Ireland a chance of creating employment for its people. The problem is that we will be abandoning the new generation if we continue to pursue policies that are about battening down the hatches, pulling up the ladder behind us and letting the outsiders survive on their own. Unfortunately, those who are being left outside to bear the full brunt of the storm are the young people who are so important to our future.

I do not want to be in the business of knocking anybody's ideas but I believe the strategy document, which is another version of the document on the smart economy, is appalling. It represents a cobbling together of existing targets from different sources that we have seen already. It was a cynical exercise. There is not one new policy or initiative announced in the document. It was a matter of doctoring targets to give a press release. There is nothing that would change the policy that has already been adopted; that is the tragedy. It is all about continuity in respect of what everyone was doing before. No person in any agency will wake up tomorrow morning and say he or she will do something different because of the publication of the strategy statement. Nothing has changed. That should not be the case.

It is not a case of business as usual. Solving the jobs crisis is not just a matter of continuing to let the agencies do what they were always doing. The problem does not lie with the agencies. Ministers, who are at the core and responsible for most of the developments that are holding back our jobs success, will not square up to the problem and take responsibility for it themselves. One example is that Ministers have said they would cut €500 million off the unnecessary compliance cost for business. That is €500 million that businesses could do with. To date, after three years of supposedly pursuing that objective, the Government has cut €20 million. Less than 4% of the target has been achieved in three years. Who is taking responsibility? Whose job is on the line in the Cabinet because of the 95% failure to meet the targets set by the Government? The reality is that none is on the line. No Minister feels under threat because he is failing to deliver something that was promised time and again to businesspeople who are trying to create employment.

The same could be said of implementing the recommendations of the Competition Authority. Some 50% of them have been ignored. Last year it was promised there would be a mechanism for ensuring they would be implemented. This has not been honoured. Costs in areas of key infrastructure were to be lowered. That was a core message from the National Competitiveness Council, but nothing has been done about it. We were to see a response to the small business credit problem but, as yet, there is none. The strategy statement is silent on all these issues. It is silent on infrastructure, credit flow, the excessive costs of Government services, barriers to entry to business and virtually everything the National Competitiveness Council has told us time and again is holding back progress.

The tragedy is that the Government wants to create an illusion that it is doing something. What it has done is set up another committee. That is the essence of the strategy that was launched yesterday. This is simply not good enough. We face enormous handicaps and the solutions to those were given to the Government as long ago as 2007 in the recommendations of the National Competitiveness Council. The council raised all the key issues, including those associated with waste policy, interconnection on the electricity grid, e-Government, public service reform, quango reviews, the payment of bonuses to people who did not deliver results, the reform of the regulatory system and the promotion of competition. The council referred to virtually all the key initiatives that would make employment easier to create. The recommendations were put on the Government's desk in 2007 when it took up office but none has been addressed. That is why we do not have an effective employment strategy. Governments will not take responsibility for what they have been directly charged with doing.

Photo of John PerryJohn Perry (Sligo-North Leitrim, Fine Gael)
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Fine Gael will think big about the potential of the small business sector to generate jobs. This week's Fianna Fáil announcement on jobs is not credible. Effectively, it means creating 1,200 new jobs per week and it makes no allowance for the huge number of job losses. The document is not credible; it just announces another new quango. The proposal to create 60,000 jobs over five years does not stack up when one considers the numbers of jobs created and lost over the past five years. Fianna Fáil has destroyed our economy, closed down the enterprise culture and destroyed the hopes and livelihoods of thousands of families throughout the country.

There is no point in the Government trying to pretend the disaster that has affected the country is the result of international factors. Fianna Fáil refuses to take responsibility or action. The Governor of Central Bank has made it very clear that 75% of the disaster now engulfing us is directly due to Fianna Fáil policies. There has been a serious loss of national competitiveness due to significant increases in the stacked-up costs of doing business, mostly imposed on the sector by the Government. Worst of all, unemployment is at historically high levels. Almost 0.5 million people are unemployed.

The challenges facing the country are enormous. Small businesses comprise the only vehicle that can kick-start job creation. Due to Government inaction, small businesses have seen their business contracts decline by between 20% and 40%.

Company insolvencies are at a record level and most enterprises going out of business are typical small businesses. Small business owners that go out of business have no recourse to social welfare benefits or protection. The same applies to self-employed people who have gone out of business. They have no support whatever and are not even documented anywhere. This represents real hardship for people who have taken pride in being active and independent contributors to the economy. Such people have taken big risks, including mortgaging their houses, and have lost everything. This is at an enormous personal and social cost. We must find a solution to this.

Local jobs have been lost in every town and village throughout the country. Owing to a record jump in the numbers unemployed, thousands of people are now leaving the country. Some 30,000 young people have left this year. A generation of young people is gone and this is appalling. Today's school leavers and graduates are experiencing the worst employment opportunities for decades. Small businesses have done what they can to survive without any Government assistance. Many are being held back from creating new jobs because of the absence of any support from the Government. As far as Fianna Fáil is concerned, the small business sector does not exist. It is not recognised at official level. Fianna Fáil regards the sector as a marginal player on the national economic scene.

The elitist attitude of this Government is such that it believes the small business sector can survive from crumbs that fall from the top down from the multinational, exporting, high-tech, smart-economy sector. The only results of Fianna Fáil's actions to date are unemployment, forced emigration, depressed economic activity and the closure of viable businesses. The Fianna Fáil Government is doing nothing to assist with the retention of existing businesses and to create new jobs in the small business sector. Fine Gael puts jobs at the centre of its economic strategy. The problems we face demand urgent and forceful action that only Fine Gael will provide. Fine Gael is the only party to present concrete, effective measures to protect existing jobs and create new ones.

It is a tragedy that small and medium-sized enterprises, SMEs — the backbone of this economy — are on the floor while this Government stands idly by. There are some 86,000 small businesses employing approximately 650,000 people. The small business sector can do its part to bring the State out of the present crisis through the creation of jobs at local level. However, it can only do so if it receives the full and enthusiastic support of the Government. As soon as Fine Gael gets the opportunity we will support small enterprise in every village and town. The small business sector is a significant source of employment, makes a significant contribution to the national economy, is domestically oriented, makes a major contribution to Government revenue income and collects a wide range of Government taxes and charges. Small business owners are effectively tax collectors.

Small business is important to the national economy and to commercial and social life in rural Ireland. It is an essential part of the supply chain for larger firms and a critical part of the support infrastructure needed to attract and retain foreign investment. Small businesses form one of the largest and most significant employer groups in the country. They provide local employment in every county, particularly at community level. Small business also plays a key role in the national development of a culture of entrepreneurship and innovation.

It is time to do something about the challenges facing the small business sector. The Government must take action in terms of credit supply, late payments, entrepreneurship and innovation, and advisory and support services for the small business sector. The Minister has said many times that the banks are offering credit, but we all know that is not happening. Finance is the lifeline of an enterprise and this is particularly true for the small business sector. Restoring the flow of credit to the sector should have been at the centre of the Government's strategy. Instead, it was largely ignored as all efforts focused on propping up a bankrupt bank. Deputy Bruton referred to a venture capitalist bank that would support small companies with a fund of €2 billion. ICC Bank was very effective in this regard in the past.

We need a comprehensive support strategy. Governments support banks who in turn support small business, and small business provide jobs in the local community. To date, however, the Government — via the taxpayer — has concentrated on bankrolling the banks. One might assume the banks would in turn support businesses, but that is not happening. If the banks supported small businesses, they in turn would create and retain jobs. Instead the Government has focused all the taxpayers' resources on the banks. Today we have signed up to a further guarantee for banks that are not doing the business.

We demand that a partial loan guarantee for small and medium-sized enterprises be introduced immediately. Despite what they may say in public the banks have shut up shop and are hoarding capital. This is putting viable SMEs under severe pressure as credit lines dry up. Many small businesses can demonstrate commercial viability yet fail to obtain loans, typically because of issues relating to risk management. The Government must immediately introduce a targeted SME credit initiative that will facilitate access to credit for SMEs. The scheme must be based on the principle of risk-sharing between the State and the banks. I do not expect such a scheme to become a substitute for commercial bank lending or to facilitate credit for companies that are not viable. It would place Irish firms on a more level footing with international competitors.

The Government should also introduce a supply chain credit guarantee facility whereby large multinational companies would jointly provide a credit guarantee with the Government for viable suppliers, partner companies and so on. This would maintain the strength and viability of their supply chain during the downturn so that they can improve their cost competitiveness and be ready for the upturn when it comes. It is time to think big about the potential of the small business sector. We must get back to an innovation-driven economy, with traditional, local small business at its heart. The economic climate is likely to drive more people toward starting their own business. We must encourage those self starters. Entrepreneurship and business development must be promoted as the fastest and best option for new jobs, economic growth and wealth creation.

Traditional, local small businesses, whether manufacturing, tourism, retail, wholesale, construction or whatever, have the potential to create new jobs. They must get as much attention and support as the smart economy. Emerging industries, including health care, biotechnology, the creative industry, green energy, post-modern agriculture and aquaculture, will be sure of high priority attention when we are in government. These segments are full of potential and Fine Gael will actively support them.

As some of the larger foreign direct investment projects retrench and close, the possibility of generating spin-offs and spin-outs from these companies must receive vigorous support. We must do more to identify sub-supply opportunities to the multinational sector for local small businesses and to work in conjunction with local third level colleges. The entire small business start-up support system must be able to respond to the growth in demand for assistance and support, both financial and non-financial. There are some supports and initiatives in place, but the small business sector needs a new strategy specifically aimed at the sector. That strategy must give equal support to retaining small business and generating new business.

In the current circumstances future small business retention must be the highest priority. The loss of a small business means the loss of jobs. There is urgent need to review the financial incentives for the small business sector and to drive new private investment in job creation through new business expansion schemes and seed capital schemes. As part of the effort to reinvigorate and grow the small business sector, one of the highest priority tasks is to upgrade management skills and management practice in the sector. Now is the best time to invest in management development for the small business sector.

Photo of Dinny McGinleyDinny McGinley (Donegal South West, Fine Gael)
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On this, our first day back after the summer recess, it is entirely appropriate that the Fine Gael Private Members' motion deals with what has become a critical unemployment situation. We are currently facing several crises in regard to finance, banking, the health system, education and in regard to crime. The most serious of all is the unemployment crisis where 460,000 people are out of work, the highest since records were first compiled, probably at the foundation of the State. It is a terrible indictment of this Government and its predecessor. This Government has allowed unemployment to escalate for the past three years until it has reached the current level.

The Government's priority seems to be bailing out the banks and ensuring zombie banks are kept alive through transfusions of billions of euro with no prospect of a return. If a percentage of that money were ploughed into job creation, the unemployment problem would not be as critical. There is nothing that tears the heart out of a community and breaks its spirit unemployment. There are two cohorts in our society where the huge increase in unemployment is being felt most seriously. The first is middle aged people who have lost their jobs through redundancy when factories and businesses close. Such people have little or no hope of finding employment for the rest of their lives. That is a dismal prospect. Second, and perhaps even more seriously, are the 100,000 young people under 25 years of age who are unemployed. There are young, energetic, enthusiastic and highly qualified people throughout the State, including engineers, architects, solicitors, surveyors and so on, who are unable to find jobs.

In my area I know of highly qualified engineers who have been out of work for two or three years and are heading to Australia and other areas. Last Sunday I was at mass in a little church near Gortahork where I met several young men barely 20 years of age who will head off to Australia this week. They told me they did not have jobs arranged but have many friends already working out there and they are more confident of securing employment there than in Donegal or anywhere else here. The emigration of young boys and girls is breaking the spirit of communities and tearing their hearts out. The Government has not yet woken up to the seriousness of the situation. Fine Gael's NewEra plan which proposed the creation of 100,000 jobs was scorned and cold water was poured on it. Lo and behold, the Government has eventually seen the light. It pulled the rabbit out of the hat recently with its proposal to create 300,000 jobs during the next few years. That proposal has as much credibility as had the Minister telling us last year that Anglo Irish Bank would cost us only €4.5 billion. We await what he has to say tomorrow.

The industrial base in County Donegal has been decimated. Our traditional industries such as textiles and so on are gone. Agriculture is at a low ebb, as is fishing, and tourism is non-existent. These are the areas we must focus on if we are to create jobs. The motion before us is constructive. It contains good proposals, including abolition of the travel tax which would result in more people coming into the country thus helping the tourism industry. Measures can be taken to assist the fishing industry and agriculture. PRSI is a burden to the many people wishing to start up in business and employ people. If these issues are addressed it would be a step towards addressing the serious problems we face. The unemployment problem will break the hearts and back of this country unless it is addressed.

I welcome the opportunity to contribute to the debate on this motion. It is entirely appropriate it is the first item on the agenda on behalf of Fine Gael on the resumption of the Dáil following the summer recess.

Photo of Joe CareyJoe Carey (Clare, Fine Gael)
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I commend Deputy Bruton on bringing forth this motion this evening. I wish to focus on a particular issue, namely, the travel tax. A significant industry in the mid-west is tourism. Levelling increased airport charges and a travel tax on passengers will not kick start our tourism industry. Neither will it help to sustain jobs or increase passenger numbers in and out of our airports in the mid-west. It is hard to marry the practice of fleecing potential tourists to this country with this week's announcement that 15,000 new jobs are to be created in the tourism sector by 2015. I suspect this announcement is akin to the announcement of the €53 million economic and tourism plan, long promised for Shannon Airport but never delivered.

The imposition of the €10 travel tax has been the most damaging in terms of Irish tourism. The disastrous travel tax appears at this stage to stand as a vanity principle for the Government while all evidence in terms of its existence points to the damage it has done and will continue to do into the future. We can see the impact these policies are having on Shannon Airport with the row back in service provision by operators such as Ryanair whose passenger throughput is expected to decline from 1.9 million passengers to 400,000 next year.

Like many Members, I have been approached by business people, many over the summer. They are being squeezed by Government and are being put out of operation owing to economic circumstances in the country. A particular case which sticks in my mind is that of a bus company based in Shannon Airport, PK Travel, which was contracted to provide a shuttle service to people coming in and out of the airport. The contract was a three-year one in respect of which the company invested €500,000 in the provision of buses. However, it was withdrawn after two years without notice, resulting in 20 employees losing their jobs and the €500,000 investment in buses lying idle, with the money remaining to be repaid. Subsequent to this, when PK Travel applied for a subsidy to help keep people employed they were told they had missed the closing date. It beggars belief that a company would be told this, a company paying, tax, PRSI and excise duties and keeping people in the mid-west employed. The Minister, Deputy O'Keeffe, should introduce a new employment subsidy in the near future in order to keep these jobs. I ask that the Minister respond to that point during his contribution to the debate.

In regard to young people leaving Ireland, weekend nights around Ireland now involve young people sitting around in circles talking about whether to emigrate to Australia, Canada or the UK. Some 100,000 people have already taken this option, resulting in a brain drain on our country, which must be stopped. I want now to put in context the unemployment crisis in the mid-west. Many of the points raised by the mid-west task force have not yet been addressed. The only issue being addressed is that of the extension of the Limerick city boundary into County Clare. I say to the Government and Minister for the Environment, Heritage and Local Government, Deputy Gormley, "Hands off County Clare". I am seeking a statement from the Minister, Deputy Gormley, that will put the people of County Clare at ease. This is a red herring. It will not create any jobs. It is an acrimonious issue and it should be put to bed. The Government should deal with the real issues raised by the mid-west task force. For example, it should deliver the Lynx Cargo facility, a €9 million investment, which will act as a magnet for jobs. What we need is jobs and not rhetoric. The Government should cease playing around with the boundaries of County Clare.

Photo of Lucinda CreightonLucinda Creighton (Dublin South East, Fine Gael)
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I thank my colleague, Deputy Bruton, Fine Gael's spokesperson on enterprise, for bringing forth this motion. There has been much rhetoric in this Chamber today, our first day of the new Dáil session. It is positive that we at least have some debate on the issues that actually matter. This is, as far as I am concerned, the only issue that matters, namely, the economy, the future of our economy, quality of life for our citizens and the prospect of returning to a situation whereby we can protect and create jobs for our people thus allowing them to remain here and not be forced to emigrate or join dole queues.

I pay tribute to Deputy Bruton. Had we listened to his contributions to various budgets in 2004, 2005, 2006 and to his warnings about the decline in competitiveness in our economy and our over-inflated property bubble, we could perhaps have avoided some of the unfortunate and devastating consequences which prevail all around the country today. I look forward to a time when Deputy Bruton will be on the other side of the House offering solutions to our economic crisis, as he does in this motion before us this evening.

I will not bother speaking about the Government's so-called jobs plan because it is a fallacy. Let us face it; it does not have any bearing or grounding in reality. If we are honest, no one can magic up jobs. There is no simple solution to job creation, a lesson we learned in the 1980s. Other countries have learned that lesson through various recessions. When one has an over-inflated Government, a Government that is wasteful and irresponsible in terms of how its spends money, a Government that is spending beyond its means, one cannot revert to competitiveness or job creation until that spending is brought under control and the conditions which allow competition to flourish and thrive are restored.

Fine Gael is this evening putting forward some solutions that will go a long way to achieving that objective, including our proposal in regard to PRSI. This is an important issue which the Government did not address in its previous two budgets. While I acknowledge that efforts have been made to curb public expenditure and try to get a handle on the public finances, the Government has not done anything to benefit small and medium-sized enterprises, restore competitiveness or make it easier for entrepreneurs to do business. I hope the Minister for Enterprise, Trade and Innovation, Deputy Batt O'Keeffe, and his colleague, the Minister for Finance, Deputy Brian Lenihan, will make the enterprise sector a priority in the forthcoming budget.

At the beginning of the recession, almost 1 million people were employed in small and medium-sized enterprises. As Deputies are aware, this figure is declining at a rapid rate. Unless we create conditions to assist such enterprises, job creation in the private sector will go into terminal decline. The only way to return to economic and employment growth is to support and encourage the entrepreneurial spirit prevalent in this State.

I hope the Government will address the issue of commercial rates, which are crippling business, particularly in the capital city and greater Dublin region. I consider it immoral that, other than bin charges for waste collection, I do not pay for any services in my local area. It is unfair and unacceptable that businesses pay for all the services from which citizens benefit. I hope the Government will consider this issue. I commend the motion to the House.

Photo of Brian HayesBrian Hayes (Dublin South West, Fine Gael)
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I congratulate Deputy Bruton and others on tabling this motion on the number one issue facing the country at this time. Deputies on both sides should raise this issue every day in order that we can ascertain precisely how we can address the human misery unemployment causes for such a large section of the population.

I went to school in the 1980s and attended college in the late 1980s and early 1990s. The terrible thing about that period was that we lost our best people, namely, the entrepreneurs and those who would naturally come to the top of any industry or profession they entered. Invariably, these individuals did not return to Ireland, even when the economy turned around in the late 1990s. The worst aspect of this from a social policy perspective is that the State, having made massive investment in primary, post-primary and third and fourth level education, will lose its brightest and most talented people to other parts of the world where they will help build other economies. The ESRI suggests 100,000 of these young people have already left our shores.

Two weeks ago, I spoke at the autumn conferrings in Cork which were attended by 600 highly talented people, most of whom had just completed four year degree courses. It is reckoned that if one does not work within two years of completing a four year degree, one loses the skills and experience acquired during one's studies. I plead with the Government, through this motion and the arguments we have made, to put in place something tangible for the 50,000 young people who graduated from college this year and are competing for jobs on the labour market with graduates from the previous year and perhaps earlier. These young people do not have any prospect of securing jobs.

We need a radical policy under which at least 20,000 places would be offered in the public and private sectors as part of a graduate recruitment scheme. The Government has produced three schemes which in sum total provide 1,700 places at a time of rampant youth unemployment, especially among graduates. We must keep young people in the economy. I do not suggest a graduate employment scheme would not cost money. Between €200 million and €250 million would be required for a graduate allowance to keep these young people in Ireland for two years. The Government should not tell me we do not have opportunities to achieve this objective in local authorities, the Civil Service, small and medium-sized enterprises and schools. Spending money on a graduate recruitment scheme would give young people an opportunity to stay in this country. Something big, bold and ambitious is required to allow large numbers of young people to remain here.

Despite all of the gloom, we must remember that 1.8 million people are still at work in the economy, virtually double the figure of ten years ago. It is crucial, therefore, that we have a strategy to protect all of those who are still in work. This will require removing red tape, bureaucrats and other elements which stand in the way of creating and sustaining jobs. Our primary national objective must be to sustain every single job. We must protect jobs, rather than standing in the way of job creation.

As I travel around the country, I often hear small business people describe an obsessive culture among public servants in State agencies which stands in the way of job creation and protection. This is the most important task ahead if we are to turn the country around, give hope and ensure we do not have another lost generation, as we had in the 1980s.

10:00 pm

Photo of Batt O'KeeffeBatt O'Keeffe (Cork North West, Fianna Fail)
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I move amendment No. 2:

To delete all words after "Dáil Éireann" and substitute the following:

"—supports fully the actions and policies of the Government designed to restore sustainable economic growth and job creation capacity to the economy as soon as possible, through:

safeguarding the future of the banking system as a provider of credit to viable enterprises in the State;

pursuing policies to ensure restoration of overall economic competitiveness including reducing the cost of doing business and taking action to reform the public sector to secure a more efficient and cost competitive delivery of public services;

planning a sustainable and achievable reduction in public spending to contain the increase in the burden of taxation that would otherwise arise and which would hamper job creation in the future;

preserving a low tax regime on companies and business to attract foreign enterprise and jobs;

providing a capital stimulus package of nearly €40 billion over the next six years which will fund infrastructure projects to support about 30,000 jobs each year for the next six years;

helping to sustain over 100,000 jobs by providing financial support to over 1,700 companies through the Employment Subsidy Scheme and the Enterprise Stabilisation Fund;

implementing an employer job (PRSI) incentive scheme to support job creation and counter the drift of people into long-term unemployment and which is expected to create up to 10,000 new jobs;

establishing the €500 million Innovation Fund to support entrepreneurs so that they can create jobs; and

increasing the number of training places for the unemployed to over 180,000 so that they have the skills to access the 96,000 vacancies forecasted to arise each year on average up to 2014;

welcomes, in particular, the Government's five year integrated trade, tourism and investment plan, Trading and Investing in a Smart Economy, designed to increase the value of indigenous exports by 33%; to diversify the destination of indigenous exports; to increase overseas visitors to 8 million; to secure an additional 780 inward investment projects through the Industrial Development Agency (IDA) Ireland and create up to 300,000 sustainable jobs across the economy."

I propose to share time with Deputies Seán Fleming, Margaret Conlon and Michael Kennedy.

I move the amendment on behalf of the Government and welcome the opportunity to respond to the motion presented by the Fine Gael Party. More precisely, I utterly reject the motion tabled by Members opposite. The calls they make demonstrate a lack of knowledge of our infrastructural investment programme, PRSI incentive scheme, strategy to increase tourist numbers, action to increase credit flow to the productive economy, policy driven improved national competitiveness, expansion of training places and increased support for entrepreneurs.

Most of all, the Fine Gael Party has demonstrated a partisan inability to recognise and endorse the comprehensive and coherent job strategy devised by the Government in Infrastructure Investment Priorities 2010-2016 and the Trading and Investing in a Smart Economy strategy.

I propose first to address the most erroneous of the charges made by the Opposition, namely, that the Government has failed to present a coherent jobs strategy. This is plainly incorrect. There is ample evidence of the significant action that has been taken across the whole government system to address the challenges faced by the economy. Our action has concentrated on taking steps over the past two years to address three key issues, namely, sorting out the banking crisis, placing the public finances on a path to recovery and tackling our cost competitiveness. All three issues are essential foundations for job creation and job maintenance.

The Fine Gael Party implies there is some single policy or intervention that will return our economy to high employment and sustainable enterprise growth. That is not the case and it is the reason the Government is working on a multifaceted approach focusing on jobs and growth. The Government's response is a realistic one which puts first things first by consolidating the fiscal position, supporting our banks as future providers of capital, keeping up substantial capital spending as an investment in future jobs, regaining competitiveness by appropriate price and wage policies, supporting jobs in the SME sector, stabilising the economy and supporting the export sector by pro-business tax policies.

This is the cornerstone of the coherent foreign trade and investment plan published yesterday to secure a 300,000 increase in jobs in the next five years. These are jobs at all skill levels, in all sectors of the economy and in every county. From the local corner shop, bookshops, bed and breakfasts, retailers, garages, printers, packers, hauliers, IT specialists, manufacturers and supervisors to CEOs, a smart economy delivers job opportunities in all these areas. This is something our critics must understand.

The Government is positioning Ireland to be successful in selling our goods and services abroad, winning global investment and attracting visitors from around the world. Our plan will help Irish farmers and firms expand their market share overseas and will boost food exports. Export-led growth is the right strategy. Supporting export-led growth is our job strategy.

Labour's strategy is simply to borrow and build. Fine Gael's strategy is unknown even to itself. This is fine when you are in Opposition. The Government, on the other hand, is setting clear, ambitious targets to be achieved over the next five years.

To reach our targets we need, of course, to start growing again. This week's official figures show strong growth in exports by Irish companies in the first eight months of this year. Enterprise Ireland companies will recover approximately 70% of the export earnings that were lost last year. Exports are up 8% between June and July and our trade surplus is up 29% to €4 billion. This strong performance is helped by the international engagements of this Government in our important trading markets. I regret the fact that this work is not valued or appreciated by the Leader of the Opposition, this being evident from his recent efforts to block an important ministerial trade mission to the US.

Notwithstanding the fiscal constraints, we are delivering what is still one of the most substantial capital investment programmes in the OECD. We will invest nearly €40 billion by the end of 2016. As well as supporting 30,000 direct construction jobs in the economy every year, it will also deliver valuable infrastructure in new roads, public transport, schools and research facilities. It will also help homes and businesses reduce their long-term energy costs through the retrofit programme.

The Fine Gael motion bemoans inaction to encourage entrepreneurship. This is incredible. Entrepreneurship continues to thrive in this country despite the challenges presented by both the global and domestic economic environments. This has been verified by the Global Entrepreneurship Monitor Reports that show that entrepreneurs starting businesses as a percentage of the population is 4.3% in Ireland, compared to just 2.7% across the EU and 2.9% in the UK. The rate of established entrepreneurs in Ireland is one of the highest across the OECD. The businessmen and women who establish and drive enterprise in Ireland, have played, and will continue to play, a central role in our future economic advancement.

Over the past decade, the Government has made significant investment in developing the broader environment for start-ups. This has included substantial investment in incubators, seed and venture funds, angel networks and mentors. Enterprise Ireland has supported between 50 and 70 start-ups each year over the past decade. We aim to increase this to 100 start ups a year by 2016.

The increased funding for enterprise under the Government's capital programme will provide for the establishment of a €500 million innovation fund as well as more funding for seed and venture capital and angel funds. Innovation Fund Ireland brings a new dimension to our existing venture capital sector and will allow more innovative ideas to become commercial realities in an improved competitive environment.

The annual competitiveness report, published by the National Competitiveness Council, is interesting. It acknowledged that since January 2008, Ireland has regained some of the competitiveness it had lost at the start of the global economic downturn. The improvement in competitiveness is closely linked to the policies the Government has pursued to restore stability to the economy. Some of the indicators of improved competitiveness can be seen in the fact that inflation remains below that of our main trading partners. We are seeing lower costs for business, particularly in areas such as energy and rental of prime industrial space and office space. Thirty three local authorities have either frozen their commercial rates at 2009 prices or reduced them for 2010. Wage costs have also reduced across the economy.

Despite this recent improvement, we are determined to do more. We are reducing the administrative burden by driving better regulation. Some €20 million in savings for business have already been achieved through cutting out paperwork, revising the rules for small businesses and making better use of on-line services. We aim to achieve €500 million in savings by 2012. Priority is being given to reducing the administrative burdens in the three key areas of company law, health and safety, and employment legislation.

Local authority charges remain a concern to the business sector and we will progress the recommendations of the recent efficiency review of the local authority system, to secure savings, which will further reduce pressure on business and ensure we can sustain and create jobs. I can assure the House that measures to further reduce costs to business will feature along side our policies to reduce the deficit and drive public sector reform.

A Leas-Cheann Comhairle, the Opposition motion mentions a number of specific proposals on PRSI, credit for SMEs, the Competitiveness Council, removing red tape and updating bankruptcy law. Well, just in case those over there have missed it, this Government has already introduced a PRSI exemption scheme for new jobs; a Credit Review Office to increase credit to SMEs; is committed to improving competitiveness; is making progress on culling red tape and has brought forward measures on bankruptcy in the Civil Law (Miscellaneous Provisions) Bill 2010.

On credit for small business, I particularly welcome the results of the recent ISME survey, which shows an improvement in access to bank credit for small businesses in the period from June to August. Some 58% of companies had accessed credit compared to 45% in the previous quarter. This is a very welcome improvement and will allow these companies to sustain and grow employment.

The role of the Government is not to directly create jobs. Our job is to ensure that the enterprise environment is optimal, so that enterprises can establish, grow and thrive, leading to the growth of Irish exports and the creation of sustainable jobs. The Government's economic strategy will enable us to go forward as a more competitive economy with a sustainable and innovative enterprise base. This Government has put and continues to put jobs and growth at the centre of our economic strategy. Our efforts have yielded results to date.

The Opposition can peddle its negativity all it wants. This is not a jobs strategy. The Opposition's sniping will not help one person get off the dole queue. Its populist outrage will not help a single Irish firm sell its products abroad. Its griping will not help Ireland win a single investment project. Nor will it attract one extra visitor to Ireland.

The Government is focused on delivering its jobs strategy and taking the right, tough decisions. That is how we will create employment, drive export growth, win more international investment and boost tourist numbers. For that reason, I commend the Government's motion to the House.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I welcome the opportunity of supporting the proposal put forward by the Minister, Deputy Batt O'Keeffe, which supports the Government's action to bring sustainable economic growth and job creation capacity to the economy as soon as possible.

It would be remiss of me not to mention the fact that the live register figures for September 2010, which were published a few hours ago, show the biggest single drop ever in the live register in any one month. I know there are pluses and minuses in those figures. However, there are 24,506 fewer people on the unemployment live register today than at the end of last month.

In January and February of last year, which I would call two black months, unemployment increased by 30,000 in each. The figures stabilised to a significant extent in the intervening 18 months but it is good to see a tangible and real reduction at this stage. This is very welcome and very important. Of the 442,000 on the live register, 293,000 are in receipt of payment for a full week and 62,000 are in receipt of payment for part of a week. It is important to acknowledge the existence of these part-time workers, lest it be assumed that 442,000 people are unemployed for a full week. This is not the case.

I am most concerned that approximately 150,000 of those on the live register are in the 25 to 34 age group. They are new young working families and are in a very difficult situation. We must make assisting them a priority.

A number of activation programmes have been put in place and 9,000 people are currently on back-to-work payments, primarily through the back-to-work allowance scheme. An additional 20,000 people are on community employment schemes and a further 5,000 recently commenced vocational training opportunity schemes, VTOS, which are run by the various VECs throughout the country. The latter schemes are much appreciated by those who obtain places on them.

The Government has put in place some concrete initiatives in recent times to assist with the creation and protection of employment. First, it changed the rules with regard to public procurement and in respect of those who tender for public contracts. These changes will make it easier for small and medium-sized businesses to tender for contracts. Many such businesses were previously excluded from tendering as a result of turnover requirements. The Government has gone further by trying to break some large contracts into smaller, more manageable contracts to which not as much foreign competition will be attracted. We will be able to give to Irish businesses these contracts which relate to products and services that are required and that will be paid for by the taxpayer through Government procurement sources.

I will highlight one figure I wish to see reversed. The initiative I have outlined will assist in that regard. Approximately 99% of all government contracts across the EU are taken up by companies in the countries where such are put out to tender. In Ireland, the figure is 18%. Essentially, and relative to the position in other EU countries, we opened the door far too wide and allowed too many foreign contractors to take up contracts here. We should move towards the EU average and design contracts in such a way as to ensure that companies here that tender for the business will be successful. We have begun this long-overdue process, which, I am sure, will be of assistance.

The Government spends approximately €4 billion on unemployment payments. Such payments should be matched with trying to retain people in employment. The employment subsidy scheme, which is excellent, is one example in this regard. I would like the funding available under this scheme to be quadrupled. We must take the necessary steps to redesign the scheme to facilitate subsidised employment and to ensure that Brussels will not object to what we are doing. I guarantee Members that the French, the Italians and the English would be able to do that which I have outlined. We have been overly politically correct in too many instances. All one need do is travel to other countries to see how they operate within EU rules to benefit themselves first and foremost. We must be selfish when it comes to matters of this nature.

In the area of construction, I would like to see the introduction of tax relief for home improvements that would be subjected to a limit. A relief of 20% could be given to people who add extensions worth perhaps €50,000 or €100,000 to their homes provided they could produce receipts showing that the work was carried out by a registered tax-compliant contractor. This would bring people back into the legitimate economy. In a recession, quite a number of people tend to move into the black and grey economies. Such a relief scheme would make matters much easier for legitimate contractors and would encourage people to spend some money, particularly if they knew that they would receive some of their tax back. Due to the fact that it would generate activity, a scheme of this nature would be self-financing.

Photo of Margaret ConlonMargaret Conlon (Cavan-Monaghan, Fianna Fail)
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I am delighted to have the opportunity to make a short contribution to the debate on this motion, particularly in light of the Government's five-year integrated trade, tourism and investment plan that was announced yesterday. In launching the plan, the Government clearly stated that its aim is to secure 300,000 jobs in the next five years. I agree with the Minister, Deputy Batt O'Keeffe, who stated that export-led growth is the solution. Such growth is the cure and it will ensure that the targets that have been laid down will be met.

The new plan illustrates the Government's commitment to job creation. However, before one job can be created, the conditions for investment must be right. We spent a great deal of time earlier discussing the need to have a properly-functioning banking system. That is one of the prerequisites to job creation. The ultimate determination relating to the cost of Anglo Irish Bank will emerge in the coming days and this will bring about certainty, finality and stability.

The public finances must also be stabilised. Again, the Government is committed to doing this. We have taken some very tough measures and made several harsh decisions. However, it is obvious that a system under which we spend €5 for every €3 we take in is not sustainable. If the banks are not functioning properly and if the public finances are not stable, then the conditions necessary for job creation will not be present. This is a matter upon which we are working.

As a small, open economy on the fringes of Europe, Ireland needs to export. Brand Ireland is, therefore, hugely important and most essential to our recovery. We need to explore all available opportunities to further increase exports. I refer, in this regard, to the export of goods and services. I do not know if anyone else saw a debate shown on TV3 late last night during which an economic journalist berated the Government for promoting tourism. She stated that no one comes here in any event and inquired why there is so much discussion with regard to tourism creating jobs. We should focus on indigenous industries. If tourism is not such an industry, what is? If we are to be treated to the kind of unbalanced commentary to which I refer, then we will certainly not get the right message across.

We aim to increase visitor numbers. Visitors come here and they spend money. We have a great deal to offer but if the media is not balanced and does not promote a positive image of the country, we will find ourselves in trouble. In my constituency, the Ulster Canal, when it is fully opened up, will offer great potential and there is also Fleadh Cheoil na hÉireann, which is extremely successful. These are but two small examples of attractions which have brought high numbers of people into the constituency. We may not have good weather but we certainly have the jewels in the crown and these must be exploited.

As the previous speaker indicated, there was a decrease in the number of people on the live register during this month. That is good news and it shows that stabilisation has occurred. However, the figures are still too high. Job creation must continue to be our central focus. I agree with Deputy Brian Hayes who stated that we must protect and sustain existing jobs, create new jobs for graduates and reduce the number of people on the live register. I also agree with his assertion that almost 1.9 million people are in employment. This hugely important fact must not be forgotten.

The daily newspapers make for depressing reading. They are preoccupied with bad news and negativity. There are many small and medium-sized businesses throughout the country which are making tremendous efforts to create jobs. In my constituency several weeks ago, the Shabra Group opened a new extension and created 35 jobs. This story was newsworthy enough to encourage any television channel to send a camera crew to cover the story. I guarantee that if a factory had been closing and if 35 jobs were lost, a queue of camera crews eager to relay the bad news would have been present. When I made a comment during an interview on national radio about the importance of the jobs to which I refer, the presenter of the programme on which I appeared told me to get a grip of myself because only 35 jobs had been created. As far as I am concerned, the creation of one job is of major importance. The creation of 35 is extremely significant. Those who are taking risks, showing initiative and creating jobs are not being given the publicity they deserve.

Deputies referred to the need to create confidence in the economy and to encourage people to spend. Negative commentary will do nothing to assist in the realisation of either of these goals.

Photo of Michael KennedyMichael Kennedy (Dublin North, Fianna Fail)
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I welcome the opportunity to contribute to the debate on this important motion. I support the Government amendment to it.

A great deal has happened during the past week. The Government brought together the various State agencies to ensure that they are focused on driving forward during the next four to five years to ensure that the maximum number of jobs will be created. Deputy Brian Hayes referred to the 1.8 million people in employment. It is vital that we ensure that those people's jobs are protected and sustained. The Government took steps in recent years, in the context of PRSI, the stabilisation fund, and so on, to provide assistance to companies in their quest to retain jobs.

The decision on the part of Fine Gael to try to stop the Tánaiste and Minister for Education and Skills from travelling to the United States was highly regrettable. It shows up Fine Gael as being very short-sighted. The Tánaiste's trip is promotional in nature and will take her to destinations across the US.

Photo of John PerryJohn Perry (Sligo-North Leitrim, Fine Gael)
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Let us see how many jobs come out of it. Time will tell.

Photo of Michael KennedyMichael Kennedy (Dublin North, Fianna Fail)
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The Boston Chamber of Commerce boasts that each week it hosts a government minister from some country or other. Here we had an opportunity where the Government with great ties to the US was going to be denied the opportunity to send our Minister to help promote Ireland with Enterprise Ireland. I sincerely hope that will not happen again.

The IDA Ireland targets are achievable and with focus there is no reason we cannot seek out new markets in China, India and other Far East countries. We should get those countries with great financial resources to invest here in high technology industry given the skilled people we have. There is no reason that Ireland as a food exporting nation cannot again build on the trade missions to China and other places in recent years and increase our exports.

While we often hear the negativity, in my constituency of Dublin North over the past seven to eight months more than 1,400 new jobs have been created. I commend IDA Ireland and Enterprise Ireland for that achievement. I would like to think that the Dublin North region is very strategic with the airport, motorways etc. Ireland has something to offer and with the right determination we can achieve those jobs.

Many speakers have mentioned tourism where creating 15,000 new jobs is realistic. While we have challenges in promoting the country, the 2012 Olympic Games in London represents a great opportunity both next year and obviously in 2012 to get our share of the market. All those foreign visitors will be 45 minutes away by air or two hours away by ferry. If our tourist groups — hotels, airlines, restaurants etc. — get together and offer good packages, I do not doubt that we can get a significant share of that market. In referring to tourism, I mention the fantastic new facility in Dublin North — the new terminal at Dublin Airport, which is a really iconic building. I ask those who knock it, including one particular gentleman of a famous airline who continually berates it, to go out and see it. It is a fantastic building that offers the modern facilities that every traveller wants. As a Deputy who represents the area I am certainly very proud of it.

A constituent recently contacted me on a matter on which I will make contact with the Minister, Deputy Hanafin. 2011 will be the 100th anniversary of the 1911 census. This constituent has written to all his overseas cousins and other relations, inviting them back to their ancestors' birthplace in Connemara in his particular case. There is an opportunity for each of us in our own small way to look at that census and ascertain who lived in our ancestors' homes and track down all the cousins, nieces, nephews etc. and invite them back. There would be a great opportunity for major celebrations in 2011.

The Government is on the right track. In terms of consumer confidence, with €80 billion in savings in banks, if 2.5% of that money were spent by consumers, it would be equivalent to a €2 billion annual spend, which would be a major boost. I suggest to everybody in this Chamber and outside that we should talk up the economy rather than talking it down. If we give people that little bit of confidence to want to spend, our country would be better for it.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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I wish to share time with Deputies Ferris and Costello.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Is that agreed? Agreed.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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I am glad to have an opportunity to contribute on behalf of the Labour Party to this important motion which we in the Labour Party broadly support and which has as its core objective the placing of job creation as the main priority of Government policy. We would have some concerns about the reference to the widespread utilisation of the National Pensions Reserve Fund in an unlimited way and the inclusion in an undefined way of the sale of non-strategic assets where it is suggested that they should be sold to generate funds for job creation. Having privatised some of our State industries, we should be wary of further widespread privatisation which may result in short-term gains at the expense of long-term losses.

A group under the chairmanship of the ubiquitous Colm McCarthy is carrying out a review of what State assets should be sold. The review is clearly a prelude to selling off what remains of the semi-State sector in order to improve the public finances. Having mortgaged our futures and those of our grandchildren in order to pay the debts of the casino gamblers, the Government is now like a desperate gambler willing to sell the family silver to fund a last throw of the dice.

The announcement of that review peculiarly came on the day that Eircom announced it was seeking 1,200 job cuts. Eircom stands as a monument to the failure of the Government's privatisation policy. After overvaluing the company and overselling shares in it, the Government could only look on helplessly as Eircom became a plaything for profit making at a number of stages by various individuals and a private equity company. As Eircom was eviscerated and loaded with debt, it had no funds to invest in upgrading its broadband provision which has left Ireland with one of the poorest levels of broadband penetration in Europe. The Government's talk of creating a smart economy rings somewhat hollow to those who are trying to run small businesses in rural areas with inadequate broadband as a result of the Government's policy and actions at that time.

When President Sarkozy came to power in France, he had intended to sell several of France's very successful state companies. When the banking crisis and its associated recession hit France, he quietly abandoned his plans as he realised that a large and vibrant state sector was a valuable asset to a nation when significant numbers of jobs were lost in the private sector.

We in the Labour Party have proposed over the past year, as has been set out in our amendment to the Fine Gael motion, the establishment of a strategic investment bank to fund viable businesses around the country and invest in strategic infrastructure projects, enabling the bringing forward of coherent sectional strategies in areas such as tourism, food, clean tech and the creative industries. This should have a focus on the reinvigoration of the State agencies, including the county and city enterprise boards, which are extremely important in the context of micro-enterprises. We should ensure the provision of high-speed broadband throughout the country and give greater priority to support for applied research to support the commercialisation of new knowledge.

Our proposal involves the establishment of the strategic investment bank, using €2 billion of funds from the National Pensions Reserve Fund before it is all lost by Fianna Fáil in casino gambling. This would leverage €20 billion and that money would then be directed towards job creation proposals in the manner I have outlined. I would also support a proposal from the Construction Industry Federation and ICTU that an infrastructure fund be established. I heard the Taoiseach say today that the National Pensions Reserve Fund is for commercial investment. Notwithstanding my dislike for tolled roads, why was it not allowed to invest in tolled roads which have been constructed under public private partnership, where private companies from other countries get all the revenues and the State bears all the risks? Here was a sure way of ensuring the pension provision for our citizens who contribute to it would increase. However, when we made that proposal I remember the Fianna Fáil PR spin merchants sent its Deputies out to berate us from on high. How times have changed given how the Government has raided the National Pensions Reserve Fund at will without getting any return.

In July when we last debated the important issue of unemployment here in the House, I proposed that the Government introduce an SME loan guarantee scheme — the Government claims we have no policy in this area — but unbelievably nothing has happened in the interim in this area. Such a scheme would make an important contribution to assist small businesses and companies get key credit and cash flow. Small and family businesses across the country cannot get the loans they need to keep the show on the road. Paying wages and suppliers is a struggle. Viable, profitable, well run businesses are going to the wall because they cannot access credit. Two years on from the introduction of the blanket guarantee, our banking system is still in crisis. We were promised that the guarantee, NAMA and the recapitalisation would get credit flowing, but our banks remain critically undercapitalised and risk averse.

I have been calling for the introduction of a SME working capital guarantee scheme for a considerable period of time and on the last occasion I outlined schematically how it might operate. The Minister for Finance and the Minister for Enterprise, Trade and Innovation should explore options for this scheme in order to help address the small business credit famine and help save jobs. These jobs in small businesses in every town and village across the country are the backbone of the economy. It is no use paying lip-service to this. Real and positive action is required to ensure they will continue to be the backbone of the economy. Similar schemes are operated successfully in the UK, Japan and Hong Kong, among others. Why is there a reluctance to introduce such a scheme here? I do not want to hear any more guff out of Members on the Government benches claiming the Labour Party does not have ideas. What is wrong with this proposal we have introduced? Today the Taoiseach told the Labour Party leader, Deputy Gilmore, that he was prepared to look at constructive proposals from the Opposition. That was a blatant lie. Every time we put forward a proposal, he finds some way of criticising it. I want a critical and proper evaluation of these proposals rather than the Taoiseach's lip-service, disdain and curling of his lip.

What is envisaged is a co-guarantee, risk-sharing scheme where the banks themselves make the lending decision but the Government steps in to guarantee 50% to 75% of the loan. The beauty of such an arrangement is that there is an alignment of interests between the loan originator and the guarantor.

Where the bank's capital is under pressure, as is the case with all our commercial lending banks, the presence of such a guarantee would reduce the level of its risk-weighted assets and, by extension, the level of capital it would need to retain on its balance sheets to back those loans. As all the banks concerned are short of capital, the deadweight loss is minimal while additionality is potentially significant. Again, the expected loss on these loans through bad loans would be likely to amount to less than 5%. The volume of loans, therefore, that could be supported through such a guarantee would be significant with the State maximising its bang for its buck.

If ever there were an indictment of the apathy with which the Government has treated the important issue of unemployment and the necessity to sustain and retain jobs, it can be found in the ham-fisted attempts to bring in the employers PRSI job incentive scheme. It promised up to 10,000 jobs but to date only 629 successful applications have been approved. As my colleague Deputy Shortall has ascertained, at this rate of progress only about 2,000 of the 10,000 promised jobs will have been created by the time the scheme is scheduled to be wound down at the end of the year. When it was announced in last December's budget, €36 million was set aside for jobs created in 2010 while it was indicated that employers could expect a saving of an average of €3,000 each. However, it took six months before the scheme commenced in June this year. Will this initiative be extended into 2011, as it is at least revenue neutral while providing a stimulus to employment?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Go raibh maith agat a Theachta. I am afraid I have been indulgent with the Deputy but his time has expired.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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Is the Leas-Cheann Comhairle sure?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Yes.

Photo of Martin FerrisMartin Ferris (Kerry North, Sinn Fein)
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This motion starkly summarises the crisis in which the State finds itself. It has record levels of mass unemployment and all the social decay that brings. It was ironic to hear a reference to the Irish diaspora in yesterday's announcement of job creation by the Government. The Government is certainly contributing to its growth by presiding over another era of large scale emigration.

The motion refers to the fact the recession in Ireland is far deeper and more prolonged than in any other EU member state. The reason behind this is directly related to issues around the State's bank guarantee and the NAMA debacle. The State has been virtually dragged to its knees by a small number of incompetent and greedy financial and property speculators. A so-called "golden circle" was able to gamble recklessly on the future of the Irish economy simply because of their political connections and political protection.

They have been likened to the old landlord class which lived like parasites off this country until the end of the 19th century. Likewise, the financial and property speculators of today contributed nothing to economic growth except to exploit the need for housing and accommodation. They also gambled overseas on the basis that they could borrow huge sums from Irish banks. These are the same banks that now refuse credit to legitimate Irish businesses and charge dubious fees to their regular customers who find it hard enough to pay their own way without having to pick up the tab for the Anglo Irish Bank disaster. The rest of us are forced into a situation where we are supposed to accept the dragging down of a whole society in order to pay for the criminal incompetence of these people. It is no wonder people are angry.

Over 450,000 people are on the live register, bringing the standardised unemployment rate to 13.7%. As these figures threaten to reach half a million people, even with rising emigration, the Government's focus remains on the future of a bank with no prospects but ignorant of the future of people with endless prospects.

Unemployment is the true gauge of economic success. These labour market figures tell their own story. The Government only suddenly discovered the jobs crisis last week. The Taoiseach organised a public session with the heads of all State jobs agencies for the first time since he took office. The public relations machine may have been in full swing but the cogs that actually create jobs are still rusty. The Government has also announced other such job creation schemes in the past. If the number of jobs it announced in the past year materialised, there would be no unemployment and a shortage of labour.

The success of its recent plan hinges on the Government's resolve and ability to keep job creation and enterprise development to the fore of the economic agenda. This involves more than just launching a plan. It involves investment and putting in resources to see the plan through. However, the Government will fall down on this and the job creation plan risks being shelved as just another public relations stunt.

Not only are we thrust into having massive structural deficits caused by an unchecked property crisis, but drastic spending cuts are throttling the domestic economy. The deflationary economic trend is disastrous for the public finances as it erodes current taxation levels while the debt burden rises. This austerity Government is failing while unemployment is soaring. People cannot afford day-to-day living and businesses cannot get access to credit, thereby creating more unemployment and emigration. That is the only policy the Government has.

The financial markets are not rewarding austerity but the opposite. As the State has introduced a bank guarantee and Anglo Irish Bank is nationalised, investors are assessing Ireland and its banking system as one. The State's sovereign debt has become tied to our banking institutions. The most recent increases in interest rates on Irish State bonds were directly linked to the uncertainty surrounding Anglo Irish Bank and Ireland's ability to pay its debts.

What is needed is a job creation policy with funding provided to small businesses to help them survive and to be able to take on more employees.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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There is a 90-minute slot in total with 20 minutes for the Labour Party tonight, divided into two seven-minute slots and one six-minute slot respectively. I call on Deputy Costello who will have six minutes.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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There seems to have been a problem. The 20 minutes were to be shared between myself and Deputy Ferris in two ten-minute slots.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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That is not what we were notified.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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There is also ten minutes tomorrow for the Labour Party.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I am afraid not.

Photo of Joe CostelloJoe Costello (Dublin Central, Labour)
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There is.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I am sorry there is.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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That is why I raised it when I was asked to conclude.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Deputy was given an allowance that may have reached ten minutes.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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I did not get ten minutes because 15 minutes was divided into two slots.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I was advised the Deputy had seven minutes.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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No, that was not correct.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Maybe Deputy Costello will begin his contribution now.

Photo of Joe CostelloJoe Costello (Dublin Central, Labour)
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I will but I was not expecting to speak until tomorrow.

I commend Fine Gael for tabling this Private Members' motion. Economic strategy and how we get the country out of its crisis is the question of the day. The Government has again, however, turned away from an economic solution. Earlier the House voted on continuing the same policy of the past two years concerning a blanket bank guarantee. The Government forced through a motion to extend that blanket guarantee to the banking institutions that have failed this economy, the banking institutions that brought us to our knees, that will not lend to small and medium enterprises and that will not provide a credit flow. The taxpayer has been asked to bail out all of these institutions, with €24 billion going to Anglo Irish Bank, €8 billion to Irish Nationwide and recapitalisation for the Bank of Ireland and AIB Bank.

Taxpayers' money is like confetti as far as the Government is concerned when it is used to bail out the banks and to fill the black hole in Anglo Irish Bank. It is outrageous. It is the focus of the Government, it is what it has done for the past two years and now it is telling us it will be extended for another three months and longer if necessary. When that is the mindset of a Government, how will we ever get out of the economic crisis?

If there is any money in the coffers, where should it go? To job retention and creation, to reskilling to move the economy on and to provide economic confidence for consumers.

We saw the CSO figures at the start of the month, which showed the road haulage business, an economic barometer for economic activity within the country as distinct from foreign direct investment exports, was down by 40%, a colossal reduction. That is the real barometer of the slide in economic activity, with 13.7% of the population on the live register, even with the slight adjustment for September, when there is always a seasonal improvement.

In the past two years, 100,000 people have emigrated, bringing us back to the 1980s and the 1950s. Those leaving are the ones we would expect to provide the impetus in the smart economy about which the Government is forever talking. Instead they will go to the four corners of the earth, to Australia, the USA, Britain and some of them to Asia where they will have job opportunities in economies that recognise the value of their education and talent. That is not the way forward.

The first thing the Government must do is decide its priorities. Does it want to bail out a failed banking system with an unlimited guarantee or to focus the resources of the country and skills of its people on trying to get the economy running again? The Minister should realise that there is only one priority — the small and medium enterprise sector. Half of all employment in the country is in that sector, with 65% of private employment in it, yet it is crying out for credit. SMEs cannot secure loans, even overdrafts are few and far between.

There is an almost unlimited pot of money in the European Investment Bank, €30 billion, for our banks to invest in new small and medium enterprises but it is not happening.

Debate adjourned.