Willie O'Dea (Limerick City, Fianna Fail)
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Question 19: To ask the Minister for Jobs; Enterprise and Innovation if he has satisfied himself that the measures in place to counter unemployment and immigration are adequate; and if he will make a statement on the matter. [21221/11]

Richard Bruton (Dublin North Central, Fine Gael)
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The Government is acutely aware of the scale of the challenge we face in combating unemployment and emigration, with more than 440,000 people on the live register. This crisis was created by years of bad economic policies and it will take considerable time to correct. The new Government is committed to getting people back to work. As the Deputy will be aware, on 10 May the Government launched a range of measures under the jobs initiative to improve the competitiveness of the economy, to support the maintenance of existing jobs and the creation of new ones, and to assist those who are currently unemployed to return to work. It includes the creation of an extra 20,900 activation places for the unemployed. These places will be delivered by the Department of Social Protection, and the Department of Education and Skills.

In addition, the Government is actively working on implementing the commitment to establish a new national employment and entitlements service which will focus our system on structured activation designed to help people develop their potential and avoid losing contact with the jobs market.

The jobs initiative also included several measures to boost the domestic economy, including: the reduction of VAT on restaurant and catering services, hotel and holiday accommodation and various entertainment services; the halving of the lower rate of employer's PRSI on earnings up to €356 per week; the focusing of the State's capital expenditure towards more employment-intensive projects in the areas of education, local and regional roads, sustainable transport projects, energy efficiency schemes and so on; and the development of proposals for a partial credit guarantee scheme to improve access to finance for SMEs, and for a microfinance start-up fund.

Much more needs to be done. Job creation can only be built by growing more successful enterprises. This requires strategies to improve cost competitiveness, improve access to credit, streamline competition and regulation, improve the uptake of innovation and develop the capability of enterprises. This will be the focus of continuing work by the Government and by my Department.

There is also great potential for job creation in several emerging sectors such as cloud computing, digital gaming and a number of others listed in the programme for Government. I am working to develop the potential of these and other sectoral opportunities.

Willie O'Dea (Limerick City, Fianna Fail)
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I thank the Minister for his response. Will he accept that many of the 20,900 activation places he mentioned were in the pipeline and had been budgeted for by the previous Government? When will the new national employment and entitlement service, which seems to be a central piece of the Government's employment policy, be available? On numerous occasions I have asked the Minister for Social Protection about this and she has been unable to give me the slightest hint of when we might hope to see it emerge. The VAT reduction is central to the Minister's employment policy. Is he aware of anecdotal evidence suggesting that the VAT reduction is not being passed on? When the Government is deciding whether to continue this relief in the next budget, what criteria will it use? How will it judge whether it is being passed on? If it decides to discontinue it, what does it propose to put in its place?

Richard Bruton (Dublin North Central, Fine Gael)
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I regret the 21,000 proposed activation places were not included in the budget and they are entirely new. As the Deputy knows - he was very critical of this - they needed to be funded by way of new sources of revenue. So these were not planned. The programme had an additional 5,000 places under Tús, which the Minister has now put into practice. That would be 5,000 in addition to the figure I gave in the reply and they were the only ones provided for.

Obviously the Minister for Social Protection is responsible for developing the national employment and entitlements service and I know she is actively working on that, which will represent a significant break. The OECD has been trenchantly critical of Ireland's approach in the past of not matching payment with activation policies and having a streamlined approach, and the Minister is determined to address that gap.

I am aware - the Deputy, himself, drew my attention to anecdotal evidence - that the VAT cuts are not being passed on. While detailed criteria against which a decision will be reached as to whether to retain this have not been drawn up by Government, we will want to see it is having an impact in terms of the competitiveness of our tourism product, activity rates in these sectors and a reduction in price. I am monitoring it closely and am asking the National Consumer Agency to monitor it, so we will gather evidence.

Willie O'Dea (Limerick City, Fianna Fail)
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No additional funding has been provided for the enterprise agencies. The Minister will realise that their record in net job creation in recent years has been pretty poor. There has been no appreciable improvement in the economies of the countries from which we attract much of our foreign directive investment, FDI, in particular the United States. Given the Government's projections of what is expected of those agencies during the coming years, what changes in policy or organisation does the Minister propose to get them to move from creating in net terms a couple of thousand jobs last year to creating the 100,000 or 150,000 planned for the next three to four years?

Richard Bruton (Dublin North Central, Fine Gael)
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As the Deputy knows, the Government is developing several initiatives designed to get companies that have not been exporting to access the export market. That the Government has also taken great strides to improve access to credit for small to medium-sized enterprises, SMEs, is a significant element. The Government is examining the potential for a strategic bank to provide new sources of capital to focus on infrastructure and enterprise development.

The Government is preparing a range of proposals to address the need to drive more sustainable enterprises. It is not just about spending more money. If that were the solution, we would have solved our problem. Much of it has to do with becoming more effective and competitive, improving regulatory systems, increasing access to credit and refocusing banks on business rather than property. There will be considerable structural change in the economy. It is not just about spending more money, as key issues must be addressed.