Michael McGrath (Cork South Central, Fianna Fail)
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Question 33: To ask the Minister for Finance the expected cost for the remainder of 2011 and for each of 2012 and 2013 of the planned jobs initiative; and if this cost will be met by spending cuts, tax increases or a combination of both. [9751/11]

Michael Noonan (Limerick City, Fine Gael)
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The Government is strongly committed to implementing a jobs and growth strategy. We intend announcing a jobs initiative as committed to in the programme for Government on 10 May. I anticipate that necessary legislation to give effect to the measures outlined in the jobs initiative will be published shortly thereafter.

The programme for Government sets out in broad terms the measures that will be implemented as part of this initiative. The measures are designed to lift public morale and confidence in the economy, to provide jobs, to provide suitable job placement for unemployed persons and to encourage spending by consumers.

In terms of the specific detail, officials from my own and Deputy Howlin's Department are working closely with other Departments in preparing the proposals and assessing the quantitative and qualitative impacts. As has been previously signalled, any costs arising in connection with the jobs initiative will have to be counterbalanced by the implementation of offsetting measures. This will ensure that we will continue to underpin our fiscal sustainability while also bringing forward policies to assist economic growth.

Michael McGrath (Cork South Central, Fianna Fail)
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I thank the Minister for his response. As was mentioned recently, when EU and IMF officials reviewed the bailout agreement, they made it clear that any initiative would have to be revenue neutral and the Minister has referred to that. The gross costs of what is proposed are significant and I emphasise the word "gross" because we all hope the measures will be successful and that some of the gross costs will be offset by additional economic buoyancy through employment creation, which will reduce the welfare bill and increase the tax take for the State. However, the gross costs for two of the measures that have been signalled for inclusion in the jobs initiative are significant.

Michael Kitt (Galway East, Fianna Fail)
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The Deputy should ask a question.

Michael McGrath (Cork South Central, Fianna Fail)
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The reduction in the lower rate of VAT between the middle of this year and the end of the 2013 will cost approximately €850 million gross and the reduction in the lower rate of PRSI will cost more than €400 million between now and the conclusion of the EU-IMF programme in 2013. Those two measures alone, therefore, have a gross cost of €1.3 billion. Hopefully the net cost will be much less but, clearly, that has to be made up. The Taoiseach recently indicated in the House that it would be by way of adjustment to internal departmental votes, which indicates that it is all spending cuts rather than any other measures. Perhaps the Minister would comment on that.

Michael Noonan (Limerick City, Fine Gael)
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We will outline the full programme on Tuesday next. When we criticised the budget introduced by the Government, which Deputy McGrath supported, in December, we selected two areas for severe criticism. First, we indicated that the budget did very little to promote job creation. Second, we outlined that the Government was receiving the growth figure without trying to influence it. To return to our previous discussion, it is possible through policy to change patterns of growth in an economy. Our approach will be to create jobs to build up confidence and give growth. I wish the Deputy's figures were correct but we do not have the resources to spend the kind of money to which he refers even over time.

Michael McGrath (Cork South Central, Fianna Fail)
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The parliamentary question reply is from the Minister, Deputy Noonan.

Michael Noonan (Limerick City, Fine Gael)
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We will approach it in a fiscally neutral way. Based on our more recent conversations, the agreement we have with the troika is that the span of the initiative is to become fiscally neutral by 2014. That satisfies it. We are largely talking about what was in the programme for Government. It is a readjustment of the budgetary position to focus on job creation and to try to get more growth in the economy. It is not a big Keynesian initiative. The resources are not available to drive demand in the economy by huge investment. It is just not there, so what we are trying to do is to take a situation, especially in certain sectors to see whether we can get more out of it, in terms of growth and jobs. That is the approach. It is morale boosting and confidence building rather than a huge spend for demand purposes.