John Halligan (Waterford, Independent)
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I move:

That Dáil Éireann:

recognises:

— the unacceptable fact that the current rate of unemployment is 14.5%;

— the crushing toll that persistent job losses, mounting unemployment and heightening emigration levels are having on ordinary Irish people and the desperate need for honesty when addressing this crisis and those affected by it; and

— the particularly devastating impact of recent job losses on areas such as Waterford City and County which have not only seen the direct impact of job losses due to closures of companies such as Waterford Crystal, the Iron Foundry, ABB Transformers, Teva Pharmaceuticals, GlaxoSmithKline and, most recently, Talk Talk but have also experienced the secondary impact that the removal of such vital industry has on surrounding and supporting industries;

condemns the present Government for:

— opting to make good the gambling debts of unguaranteed bondholders at a time when desperately-needed State funds should be invested aggressively in job stimulus initiatives;

— undermining the right of workers to a fair day's work for a fair day's pay with the introduction of a deeply flawed National Internship Scheme that allows employers to recruit often skilled, qualified and experienced individuals into entry and non-entry level positions which in no way, apart from their €50 per week rate of pay, bear any resemblance to an internship; and

— introducing a piecemeal and tokenistic jobs budget and initiative aimed more at producing headlines than creating true growth in employment levels; and

demands that the Government:

— restore the right of workers to a fair day's work for a fair day's pay by immediately addressing the deep flaws in the National Internship Scheme;

— return sanity to the commercial rental sector by eliminating the presence of upwardonly rent reviews in the Irish economy;

— abandon its commitment to pay back the gambling debts of unguaranteed bondholders and instead use State funds to implement a truly effective jobs initiative that promotes education, training, entrepreneurship, meaningful support for the small and medium enterprises (SME) sector and the development of a genuinely 'smart economy'; and

— honestly deliver on its commitment to 'Get Ireland Working'.

I am sharing time with a number of Members from the Technical Group.

I did not get an opportunity last week to thank the Minister for his visit to Waterford in an attempt to try to stop the closure of TalkTalk. I genuinely mean that. I did not get an opportunity last week because before the Minister came into the House, I was turfed out of the Dáil for a week, as the Minister is probably aware.

On a serious matter, the latest report on the economy issued by accountants, Ernst & Young, states that it could be 2022 before employment regains even 2007 status. That is a fairly damning report. It also states that 54% of all those out of work and without a decent income have been in that position for well over a year or more.

There has been a 170% increase in youth unemployment in the past two years and there is huge despondency among the youth. All one has to do is speak to youth organisations and read reports of those who deal with youths who are facing the terrible consequences of unemployment and not being able to be employed, despite whatever qualifications they might have. The latest statistics also show that only 20% of all FÁS trainees in the past two years have managed to get some form of work.

Whatever way the Minister looks at all these figures, which indicate that almost 500,000 people are unemployed, they are damning statistics, especially on the previous Government's policies, but they do not look too good for the current Government's policies in dealing with the huge unemployment levels. For instance, a report from the Society of St. Vincent de Paul stated that the vulnerable are on the verge of despair and that in 2010 it received a 35% increase in calls seeking its assistance. All such agencies go on in the same manner. Barnardos talks about increased sourcing of loans from loan sharks, more children going hungry or waiting longer for treatment for illness, and so on. I could go on. What it comes down to is that it is unsustainable to have almost 500,000 people on unemployment benefit.

Many of those job losses are a direct result of austerity measures put in place by the previous and current Governments. Further measures, and we are talking about cuts of €3.6 billion or even more, will further drive down spending and drive the economy further into recession, which will stop growth and inevitably lead to more job losses.

If we examine the current spending figure in this economy, we can see that hundreds of thousands of people are restricted in terms of spending because they have restricted power. I refer to people in low income groups, people on social welfare and so on who cannot spend into the economy and therefore cannot help the economy grow. Thousands of others are paying down debt. That is their first priority and therefore they cannot spend into the economy. Many who are able to spend into the economy, and the statistics show this, are saving because of an uncertain future. All of that is taking money out of circulation.

Does the Minister accept that if people do not spend and money is taken out of circulation, the consequence is that people earn less, buy less, products are not sold and this ultimately leads to job losses? That is evident in clear statistics which indicate that from 2010, almost 1,200 small business were deemed insolvent. Thousands more were shedding jobs, with thousands more close to the edge, so to speak. As people buy fewer commodities, all those companies let people go, and that is a consequence of reduced spending. Our argument is that we cannot reduce unemployment by curtailing spending. In fact, we will increase unemployment. That has been shown in economies throughout the world.

Regarding small businesses, all the evidence from the banks is that 50% of businesses were refused credit last year and the year before by banks who could have kept people in jobs. That is in spite of all the promises the Government made and commitments made by the banks.

Surely sound economics at this stage would be to encourage people to spend and not to cut. That generates growth, encourages people to spend in the economy and creates jobs, which will take people off unemployment benefit and reduce the billions of euro we are paying out on unemployment benefit.

The Minister's answer to this is, for instance, the speculative cuts in overtime and anti-social working hours. The Minister made an announcement some months ago and as a result, 240,000 low paid workers in industries such as hospitality, cleaning, agriculture, hairdressing and so on will face pay reductions. Their working rates and overtime rates will be cut. They will not get the full rate for the anti-social hours they work. The Minister announced that he was reversing the €1 in the national minimum wage. All that will do is drive down spending.

The Minister's answer to this problem is the internship scheme, which is deeply flawed. It undermines the rights of workers to a fair day's pay for a fair day's work. No one will tell me that this scheme will not be used to employ part-time workers instead of employing full-time workers . Why would they not take someone off social welfare and give them €50 and perhaps later let a full-time worker go? There is no question that this will happen, and there is some evidence that it is happening already.

On the Minister's job creation proposal, 20% of people who did FÁS courses last year barely got any sort of employment. People do not want schemes. They have enough schemes. They are looking for full-time jobs. It is a question of value for money with FÁS. It must be remembered that it spent €645,000 on junkets some years ago. That is what it did with some of the money we put into it.

What are the alternatives? It costs in excess of €20,000 per year to keep someone on social welfare. Over three years, it could cost the Government €80,000, given the cost of statutory redundancy, stamps, social welfare, fuel allowance, medical cards and so on. The programme for Government states:

Job creation is central to any recovery strategy. Every person who leaves the dole and goes back to work reduces the deficit by an estimated €20,000, spends on average an additional €15,000 on goods and services and also reduces the risk on the banks' mortgage books.

That is pure and simple. Is there no thinking outside the box? Why can we not use that money to take people off unemployment, perhaps by giving it to a small business to enable it to sponsor a worker? That is one way of reducing the deficit.

The Minister for Finance astonished and to some degree confused people a couple of months ago when he urged people to spend to help the economy grow. That is what we are proposing tonight, and other Deputies will discuss how we should create jobs and so on. No economy will grow by cutting. We have to urge people to spend, and we can only get them to do that by giving them a decent wage so they have spending power in the economy. We can then reduce unemployment rates substantially. We must remember that keeping someone in unemployment costs €35,000 a year- I put the Government's own figure to the Minister again. That does not make sense to me.

Mick Wallace (Wexford, Independent)
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I am fairly certain that the Minister understands that business requires investment and stimulus if it is to thrive That is its nature. I was in business for 30 years - I am still in it, just about - and I know it is difficult to function without access to money. We all agree that the lack of jobs is a major problem. When I hear the Government say that one of its primary aims is to create jobs, I am glad to hear it. I cannot see how austerity will create jobs, and if we continue being dictated to by Europe, I do not think things will change much. We all know that unemployment causes huge social problems and that we get a poor economic return from it. There are problems with it right across the board. The Government's initiative of reducing VAT for the catering industry gave it a big boost. I can tell the Minister that from having the wine bars. It has been a huge help in the past few months and it has really made a difference. That stimulus measure is to be welcomed because it is positive, but the general theme from the Government and the previous Government has been the opposite. Austerity is the opposite to stimulus and investment.

A fellow called Dave Kohlbeck asked to meet me recently. He has a company called Cleanair Products Limited. He initially worked for a multinational company so he has access to export markets. He is into anti-allergy bedding, which sounds unusual, but seemingly there is a good market for it. It helps with dust mite allergies, asthma and other sinus problems. He came up with a business plan. All he needed was a loan of €40,000 and he promised to employ six people in the first year and ten people within three years. He went to the credit union first, thinking it would be his best bet, and it was really impressed. It said that it really liked his business plan but the regulator has stopped it giving money to businesspeople for the moment. He told me that some credit unions are being allowed to do that but some are not. I do not understand that and I have not had a chance to look into it. Next, he went to AIB and Bank of Ireland, but they could not even tell him why they were refusing him. That will not be a shock to any of us, because we know the banks are more or less closed when it comes to lending to business. He went to the South-East Enterprise Platform Programme and the people there were positive and helpful, but they had no money to give him. All the avenues are closed to him. I do not know what he is going to do. He is putting the small amount of savings he had from his last job into trying to put his company on a level where he can look ahead and start to develop the business. He has invested his own money in it, but he needs the €40,000 to get it off the ground and make it work. I do not see how the country will recover if we do not help people like this guy, who is prepared to stick his neck out, be entrepreneurial and go for it. He is full of beans and really energetic. The State has to see that it is in its interests to give such people a leg up.

Unfortunately, many people are suffering because of the austerity they are experiencing, especially the less well off in society, who are certainly feeling the most pain. I understand the Government's actions are being dictated very much by European policy, but it can make some decisions. Sadly, it has decided to accept lock, stock and barrel what the Europeans are throwing at us. I have always been pro-European, but I have been following what is happening in Europe very closely for the past few years and I am not so sure any more. Europe was a great thing for us, but I am not sure that will continue. I am not convinced it will survive in its current form because it has become so big and powerful - it has become problematic and unmanageable. Listening to what the Germans have to say, I think they are coming to the same conclusion.

I will read from a good article by Paul Kingsnorth in The Guardian on 25 September. He looks back on a book written 50 years ago by a fellow called Kohr, and he also quotes the book. It is difficult to believe it was written 50 years ago:

Drawing from history, Kohr demonstrated that when people have too much power, under any system or none, they abuse it. The task, therefore, was to limit the amount of power that any individual, organisation or government could get its hands on. The solution to the world's problems was not more unity but more division. The world should be broken up into small states, roughly equivalent in size and power, which would be able to limit the growth and thus domination of any one unit. Small states and small economies were more flexible, more able to weather economic storms, less capable of waging serious wars, and more accountable to their people. Not only that, but they were more creative...

Bigness, predicted Kohr, could only lead to more bigness, for "whatever outgrows certain limits begins to suffer from the irrepressible problem of unmanageable proportions". Beyond those limits it was forced to accumulate more power in order to manage the power it already had. Growth would become cancerous and unstoppable, until there was only one possible endpoint: collapse.

We have now reached the point that Kohr warned about over half a century ago: the point where "instead of growth serving life, life must now serve growth, perverting the very purpose of existence". Kohr's "crisis of bigness" is upon us and, true to form, we are scrabbling to tackle it with more of the same: closer fiscal unions, tighter global governance ... more economic growth. Big, it seems, is as beautiful as ever to those who have the unenviable task of keeping the growth machine going.

This shouldn't surprise us. It didn't surprise Kohr, who, unlike some of his utopian critics, never confused a desire for radical change with the likelihood of it actually happening. Instead, his downbeat but refreshingly honest conclusion was that, like a dying star, the gigantist global system would in the end fall in on itself, and the whole cycle of growth would begin all over again.

Thomas Pringle (Donegal South West, Independent)
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I welcome the opportunity to speak on the Private Members' motion on behalf of the Technical Group. It is a worthwhile and timely motion, coming against a background where we are rapidly approaching 500,000 people unemployed, with companies like TalkTalk moving abroad to low cost economies, doing what multinationals do, spending time here before moving on to where they can make even more profit.

We will probably be accused during the debate on the motion of not coming up with ideas or proposals for how we can create jobs. I will use my time tonight to give three examples that can make significant change and could be policies the Government could pursue at very little cost and that would create confidence in the economy and perhaps encourage people to create jobs, shrinking the dole queues instead of growing them. There is no doubt that the current path, where we insist on paying back unguaranteed bondholders and doing what the EU-IMF tells us, will lead to longer dole queues.

We should encourage people to set up businesses and work on their own. I come from a region in the north west where one in five people at work is self-employed. During the election and since, we have all met with self-employed people who now have no work but are not entitled to any benefits under the social welfare system. The Government should change the PRSI regulations to allow self-employed workers to pay an extra PRSI contribution that would eventually entitle them to jobseeker's benefit if they end up unemployed. This would be a compulsory measure and would be self-financing because there would be a lead in time before people are entitled to benefit. Ordinary PAYE workers must have 52 contributions in the previous two years before they are entitled to any benefit. The self-employed who pay into this system would take time to accrue the benefit and if they then needed the benefit, it would be self-financing or, at most, at a very low cost to the Exchequer. The self-employed already pay a contribution but it should be doubled from 3% to 5% or 6% and made compulsory. There is already a voluntary scheme in place for the self-employed to pay extra contribution, but very few avail of it. When things are going well people do not think something will go wrong and they will need something to fall back on. By changing the PRSI contribution system, we could create a limited safety net for those who take the step to create a job for themselves. We could also put in a place a system where those self-employed who employ more people could pay a reduced personal rate, encouraging them to take people on and leading to employment growth. That system would go a long way to creating confidence and boosting small businesses, reducing the dole queues and stimulating the economy.

A study entitled "Creative Edge" was carried out by the Western Development Commission, looking at the seven north-western counties, including Donegal. It has shown that by helping creative companies in the north-west region to export their services and products, 17,000 jobs could be created. All it takes is for Enterprise Ireland, the IDA and the other State agencies to work with those companies to show them how to export their services. This scheme would not need internship programmes where people provide free labour; it would simply show these companies how to develop their businesses, creating 17,000 jobs in the north west alone, not to mention the impact such a scheme would have on a country-wide basis.

We could also develop a wood for energy and home heating industry. Already people are working in this area and we have all the necessary natural resources. We do not need subsidies, we simply need to show people this can be done. Projects are already under way that demonstrate how this can be developed. The Western Development Commission has estimated upwards of 1,000 jobs could be created in the western region by developing supply chains and the industry. It would also have the added benefit of offsetting imports of home heating oil. We import €1 billion worth of home heating oil but we produce five times more wood and biomass than we would need to heat the entire country. By expanding this area we would develop an indigenous industry, improve the balance of payments and move away from oil dependency while creating more jobs.

Some of these ideas would provide stimulus for the economy, producing jobs at very little cost, with no need for fanfare about internship programmes or fancy announcements about 100 jobs here or there. Instead, in every community across the State we would create five or six new jobs, providing a boost to the economy throughout the country. I ask the Minister to take these ideas on board and bring them to fruition. He has the ability and the tools to do it and it would be to all our benefit.

Mattie McGrath (Tipperary South, Independent)
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I also welcome the opportunity to contribute to this important motion and I compliment my colleagues on putting it together. I also am glad the Minister is here because I know he is interested in and concerned about the blockages that stop companies from taking people on or that stop people from working.

As a small businessman, I know every small business would take on one or two more people if they were encouraged. That would make huge inroads into the dole queues. Unemployment leads to utter devastation, with 95% of people only wanting to do a decent day's work for a decent day's pay to provide for their families. We all hear stories about fraud and how much money unemployed people are getting. Those on middle income are getting more frustrated. I have personal experience of people going on a three day week and finding the system immediately favours them. They get six days pay for a three day week and get three days social welfare. That anomaly should be dealt with. That is bad enough but then there are all the bonuses the person in employment does not get, all those fringe benefits for those on low incomes. I know of companies who let workers go on a three day week after 25 years working with them and when the work picked up, they did not want to come back because the other system suited them. It favours the black economy because they will do nixers or work for €100 cash. That is a complete blockage and I ask the Minister to check that.

TalkTalk treated the workforce and the State agencies disgracefully. Those were all IDA-led jobs. Earlier we were debating the Bill that is being rushed through to protect Quinn Insurance. This will cost between €700 million and €850 million. We had to save the jobs but 1,500 jobs divided by that sort of money is costing a lot. That is not the end of it; there will be further austerity as John Citizen is forced to pay a levy on every insurance policy.

This is a further punitive measure that will stymie businesses which, as the Minister knows, are on their knees. They cannot take that kind of increase. Where is the wisdom in putting that kind of money into shoring up a disgraced bank? I still have an interest in it. Bondholders are still being protected. A rich-picking insurance company has seen the success of Quinn Insurance and wants that part of the company. Anyone can see through that.

An EU fund was available to help redundant Dell workers. We have a huge inability to change the system, which should be caught by the scruff of the neck and shaken. I heard an official from a State agency today who was unable to answer questions as to why that fund was not drawn down and how so few people set up as self-employed. The questions were left for someone else to answer. It is an outright disgrace to give that kind of money to create 250 jobs. I compliment agencies on creating jobs but that is not a good return on State spending. Departments and agencies are not pulling their weight.

We got carried away in the good times. Social partnership drove business out of the country. That is why TalkTalk and other companies are leaving.

I did not support the cut in the minimum wage and I compliment the Government on restoring it. It must be viable for someone to go to work. It costs money to go to work.

We must cut out red tape. This is not happening because vested interests have their hands clasped around those interests. The Health and Safety Authority, the National Employment Rights Authority, NERA, and agency after agency which have chief executives and regional offices throughout the country are a crying disgrace. Instead of walking into business premises, flashing cards and telling employers that employees should be paid one rate five minutes before midnight and a different rate five minutes after midnight, NERA should offer help. The agency should be renamed the national employers and employees support agency. We do not need another quango to frighten the life out of businesses. We need a change of attitude from top to bottom. The people who manage these agencies are not in the real world.

We have too much legislation. Employees' rights legislation was introduced in the 1950s, when it was badly needed. Since then, however, we added more levels on top of the original legislation. Any self-employed person who employs six people will need a book-keeper and someone to manage the various regulations and agencies.

We need employment stimulus. Most business people start small. Tosach maith leath na hoibre. Anyone who starts a business must have vision and passion. Many small businesses have gone to the wall because we did not have a proper construction Bill. When big companies went out of business there was no protection for the small firms, who were not paid. Human tragedies resulted from that. When a small firm goes out of business the employees get unemployment benefit, and rightly so, but the employer gets nothing. How will such small employers find the courage to start up again? They have ideas but they cannot get a shilling from the banks. This and the previous Government produced plans and reports on how much they would spend on job creation. The banks do not have the money, or if they do they are not lending it. Something must be done about this. Why would a person with initiative and ideas face the ordeal of setting up a business again? He or she would be persecuted by many of the State agencies. Why would a self-employed person who was forced to close through no fault of his or her own start again? If we kill initiative we will take a long time to develop it again.

We must focus on keeping the jobs we have. We must stop the haemorrhage, cut out the red tape and encourage people rather than discourage them on a daily basis. Small business people are frustrated, blackguarded and not supported in a meaningful way. I am not looking for special favours. I am simply asking that people with initiative be allowed to carry on, grow their companies and create better employment. Most business people value their workers and treat them properly. In that way they create a better rapport. Everything is better when people are happy working together and driving forward.

It was heartening to be at the ploughing championships last week and to see the farming industry, which has come out of a huge depression, buoyant and in good form and about to spend, if farmers can get the money. Finance is the big problem.

The Minister knows my views. I appeal to him to release the shackles on enterprise and cut out at least half of the red tape.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I suspect that the Minister would agree that unemployment, particularly at the levels we are now witnessing, is unacceptable and that it must be everyone's priority to do something about it. It is demoralising for people who were working and who want to work to find themselves dependent on social welfare and with no prospects of getting back to work. They face the difficulty of meeting mortgage repayments, paying bills and trying to live a dignified existence, but they also face the demoralisation of not working. Unemployment will create a social cost if we do not deal with the problem quickly. We are all familiar with what mass unemployment over a long period led to in the 1980s, when serious damage was done to communities across this city and the entire country. We all understand that and how urgent it is to deal with it. Any talk of success, improvement, recovery or being on the right track means very little if we do not address that problem quickly.

I am sure the Minister would also agree that getting people back to work has to be central to any sustainable economic strategy. One cannot grow an economy with this number of people unemployed and dependent on social welfare, considering its cost to the Exchequer.

The strategy employed by the Government, the European Union and the International Monetary Fund, if I understand it correctly, is the following. We nurse the banks back to health. We need them because, no matter how awful they were or how badly they misbehaved, without them we cannot get credit back into the economy. We must accept this necessary evil of nursing them back to health. We must cut costs in order to make ourselves competitive, grow exports and get ourselves out of the mess we are in. That seems to be the strategy being articulated by the Government for dealing with the current economic crisis, but there is a major flaw in the logic of this strategy.

It is apparent if one looks at the effect of the austerity strategy over the last couple of years. Things have not got better. They have got worse on all those fronts. The focus on nursing the banks back to health has not produced a release of credit into the economy. We can all see this. No money is going from the banks into small businesses, despite our huge efforts to recapitalise the banks and nurse them back to health and the enormous austerity people have had to suffer to do this.

Unemployment has not got better. It has got worse. There is no sign of significant economic growth. There has been a small improvement in the export situation but, given the contraction in the rest of the economy, exports are too small a proportion of our economy to drag the country out of recession or to make up the ground necessary to get all those people back to work.

The view that the current strategy is not working is not coming only from the Technical Group or from the left, or even the extreme left or whatever term is used to ridicule us. The UN Conference on Trade and Development produced a report in the last couple of weeks. It states:

A shift from fiscal stimulus towards fiscal tightening is self-defeating, especially in the most developed economies which were severely hit by the financial crisis. In such a situation a restricted fiscal policy may reduce GDP growth and fiscal revenues and is, therefore, counterproductive in terms of fiscal consolidation.

It goes on to say that the fiscal imbalances were not a driving factor of the current crisis rather, they were a result of the crisis. Getting the books balanced is not the issue because the books are unbalanced because of the financial crisis. It further states that public bail-outs of financial institutions accounted for a large portion of the deficit, reflecting a conversion from private into public debt.

The UN is saying that it was not profligacy in public spending that created the deficit rather, it was the taking on of the private debts of the bankers. It states public opinion and policy makers should not trust again those institutions, including rating agencies, to judge what constitutes sound macro-economic policies and management of public finances. The reduction in growth promoting fiscal expenditure may lead to a decline in future Government revenues that would be larger than the fiscal savings obtained by retrenchment, with negative consequences for long term fiscal and debt sustainability.

Michael Kitt (Galway East, Fianna Fail)
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The Deputy has two minutes remaining.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The UN states that, as an alternative, increases in spending on infrastructure, social transfers or targeted subsidies for private investors tend to be more effective in stimulating the economy because they directly lead to job creation, purchases and demand.

The argument for stimulus and investment rather than austerity and a focus on bailing out the banks is being put forward by the UN. It is also put forward in today's The Irish Times by Mr. Paul Krugman, one of the most prominent economists in the world. I do not understand why the Government, EU authorities or IMF will not even debate this alternative strategy given the obvious failures of the strategy of austerity and bank bail-outs.

The Minister may say that we have no choice because we are a small economy that is bankrupt and dependent on EU money and that even if the Government agreed with me or with this analysis of the UN there is nothing we can do about it. I put it to the Minister that there is. The Minister, Deputy Howlin, told us recently that our deficit is €15 billion. He said that if we do not do what the EU tells us we will be left with a deficit of €15 billion. The Minister accepted that the €15 billion includes the interest repayments on the loans, which on an annual basis is roughly about €4 billion or €5 billion, leaving a deficit of approximately €10 billion or €11 billion. If one considers that our social welfare budget is approximately €21 billion, it would be reasonable to suggest that half of that results from people who are unemployed but do not want to be unemployed. It is costing us €20,000 per person to keep people on the dole doing nothing when they want to work.

Michael Kitt (Galway East, Fianna Fail)
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I must ask the Deputy to conclude.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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In other words, the €10 billion could be achieved if we put people back to work. That is the reason we have a deficit. I am not suggesting people should work for their dole payments. Clearly, they must be given better wages than that but the extra money could be, for example, made up from the remaining €5 billion in the National Pensions Reserve Fund or by putting a small tax on the super wealthy. If we combine this with the current social welfare budget we could put people back to work doing things such as developing the agri-food sector, sustainable energy, generic medicines and the vital infrastructure of the country. Why can we not try that approach?

Michael Kitt (Galway East, Fianna Fail)
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I thank Deputy Boyd Barrett for his contribution.

Richard Bruton (Dublin North Central, Fine Gael)
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I move amendment No. 2:

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

"recognises:

— the difficulties faced by many individuals and families as a result of job losses in the current economic climate;

— the need to continue to take concerted action to reduce the unemployment rate of 14.2%, which is a legacy of the incorrect policies pursued over the last number of years by previous Governments; and

— that, notwithstanding recent improvements in the competitiveness of the Irish economy, further measures need to be taken to support economic recovery;

commends the Government for:

— the strong and decisive actions and policies which are designed to restore sustainable economic growth and job creation capacity to the economy as soon as possible;

— the measures announced in the Jobs Initiative to stimulate the domestic economy,including the reduction in the lower rate of VAT, the halving of PRSI on jobs paying up to €356 per week and investment in labour intensive local capital projects such as school works, investment in local and regional roads and home energy efficiency;

— the further measures taken in the Jobs Initiative to provide an additional 20,900 places in training, education and work experience programmes;

— the creation of the National Internship Scheme, 'JobBridge', which is aimed at providing work experience and training in enterprises for people who have been on the Live Register for 3 months or more and the success of the scheme to date, which has placed over 1,400 interns since 1st July of this year;

— the importance of continuing policies to support our enterprise culture to provide investors with confidence, encourage growth in the economy and promote further foreign direct investment and the growth of indigenous businesses;

— the work underway within Government in relation to increasing access to credit for viable businesses, in particular through the recapitalisation of the banks, the development of a partial credit guarantee scheme and the establishment of a microfinance fund for start-up businesses;

— implementing policies to stimulate the development of new business and facilitate the retention of jobs and expansion of existing companies through the ongoing work of the enterprise agencies;

— the stronger focus on strategies to promote exports and assist Irish based businesses to compete on global markets;

— its support for the development of a more dynamic venture capital industry through the implementation of Innovation Fund Ireland; and

— pursuing policies to ensure restoration of overall economic competitiveness, including through the commitment to legislate to end upward-only rent reviews for existing business leases, reforming the Joint Labour Committees (JLC) system of wage settlement, to legislate to tackle legal costs, and to implement the findings of the Local Government Efficiency Review Group;

notes the continuing impact of these policies reflected in:

— strong export performance and our highest ever trade surplus;

— the creation of new jobs in companies such as Twitter, Bioware Studio, Coca Cola, Arvato and others; and

— increased tourist activity; and

encourages the Government to continue to develop the employment strategies as outlined in the Programme for Government.".

I wish to share time with Deputies Olivia Mitchell, Gerald Nash, Paudie Coffey and Jim Daly.

Michael Kitt (Galway East, Fianna Fail)
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Is that agreed? Agreed.

Richard Bruton (Dublin North Central, Fine Gael)
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I thank the Deputies who tabled this motion, on which we have heard an interesting range of contributions. It would be impossible to do justice to all that people have said.

As pointed out by Deputy Halligan, it must be recognised that the Government inherited an appalling situation from the previous Government. We are spending 40% more than we are raising in revenue. That is the reason we do not have options involving an easy fiscal stimulus. We are already spending vastly more than we take in. We cannot borrow from anywhere but one source, namely, the EU and IMF. The previous Government's policy resulted in the collapse of the banks and public finances, the loss of 350,000 jobs and a collapse in our competitiveness. Previously, we were the fourth most competitive economy. We have now slumped to 29th position. We lost 31% in our cost competitiveness in export markets. For six years in a row, we lost export market share. That is the recipe of economic collapse created by the previous Government and inherited by this Government.

There has a been a decisive shift in emphasis. This Government has not been all about nursing along the bad loans of the past or about fixing the public finances. The first action of this Government was a decisive shift in the tone and direction of debate through the introduction of a jobs initiative. Deputy Wallace acknowledged that the VAT cut has had an impact. Other people have told me the PRSI cut has also had an impact. Despite the criticism of JobBridge, 4,000 employers are now offering quality employment. I recently visited VMware in Cork, a significant multinational company which is not alone taking on people from this scheme but is investing €15,000 of its own money in training them. This should, because of the nature of the enterprise - cloud computing - guarantee them a job either with VMware or another company.

It is not true to say that this Government has been continuing on with what the previous Government did. We have restructured the banks. We have created pillar banks that have loan to deposit ratios, that are recapitalised and are in a position to lend. However, as Deputy Wallace said, that does not mean they are lending. We are confronting that issue, in part by setting targets, which, disappointingly, the banks have not been hitting, and by deliberate interventions. We will shortly be producing a temporary partial loan guarantee scheme to address the type of needs referred to by Deputy Wallace, namely, the person trying to set up a business but who cannot get €40,000 to do so. This scheme will not be finalised until later in the year. The constituent to whom Deputy Wallace referred could have gone to the credit review office of John Trethowan who is overturning half of the banks' decisions in respect of loan refusal in such situations. There is a need to confront the banks. Deputy Wallace or others should advise the person concerned to do that.

We will also shortly be introducing a micro-finance scheme which will be open to small start-ups who cannot get access to funding. Micro-finance is available in most European countries but not in Ireland. It will fill a gap. There are continuing problems in terms of people accessing credit, which we need to address and in respect of which we need to develop a policy. We are only six months in office. The banks have been cleansed of much of the material that needed to be disposed of, namely, external overseas loans. We now need to manage our banking system into a position whereby it can lend leading to export-led recovery.

I recently visited the United States. Bankers there often refer to themselves as bankers whose expertise is in lending into the green economy. These banks specialise in that area, know how the sector works, understand the dynamic of it and invest in and lend to companies that can build a future in that area. We do not have that level of expertise or hands-on ability within our banking structure. We will have to rebuild that. That is part of the transformation that has to happen if we are to have a banking system that is fit to drive a small open economy seeking to expand its export performance.

A number of speakers said that this Government is all about cutting costs. Governments do not create jobs. We need long-term viable enterprises to create sustainable jobs. When a Government spends 40% more than it raises in revenue, it is not in a position to put people back to work through massive spending schemes, as suggested by Deputy Boyd Barrett. Such an option is not at the disposal of a Government that has had to go to the lender of last resort to keep the show on the road.

Instead, we must concentrate on how we can build a strong export-led recovery and confidence in our economy so that those who could invest will invest in it. This is the challenge we face. The first step is to get cost competitive. Anyone who pretends Ireland is sufficiently cost competitive is fooling himself. The National Competitiveness Council has stated that in business costs such as water and waste Ireland is one of the most expensive countries. A heap of services, many of which are provided by the public sector, need to become competitive.

A change in this regard is starting, nonetheless. The National Competitiveness Council reported recently costs are improving with Ireland now 10% more competitive that it was two years ago. A turnaround is happening with exports strong over the past two years and market share is being rebuilt by young dynamic companies. There was an increase of 50% in the number employed in high potential start-up companies supported by Enterprise Ireland in the first half of this year.

While the Deputies opposite might be right in claiming the jobs initiative is not enough to restore full employment, this is all about rebuilding confidence in the economy. Other countries will admit Ireland is confronting its public finances. The Government has renegotiated the bailout deal with the EU which makes the debt sustainability much stronger as we are not paying exorbitant interest rates for the moneys on which we rely. The most creative and dynamic multinationals are choosing Ireland as the place to do business, as seen in yesterday's jobs announcement from Twitter and today's from Dun and Bradstreet.

I share Deputy Pringle's concern that Irish companies are not sufficiently accessing new export markets. Returning to the Department after 14 years, I was disappointed to learn the share of Irish indigenous exports has not increased since 1997, remaining at 10% of total exports. We need to drive these companies. This will involve securing finance for them so they do not have to sell off because they have hit their ceiling and cannot expand.

I am not understating the scale of the challenge that faces us. I agree with Deputy Boyd Barrett that as a society we must decide employment is our priority. It will, however, be driven by enterprise and not a free-spending strategy from the Government. We cannot afford such a scheme in the first place and in any event they tend not to work. We must rebuild a strong enterprise economy that is more creative, competitive and effective in winning and opening markets. The Tánaiste and Minister for Foreign Affairs is addressing these areas. The Ministers of State at my Department, Deputies Perry and Sherlock, are focusing on small business and innovation. I believe, with much effort and patience, we can turn this economy around. We can create the strategy to change the economy around, one based on prudent management of our resources, a willingness to reform the way public resources are managed and driving enterprise and creativity through every sector.

Olivia Mitchell (Dublin South, Fine Gael)
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Unemployment must be the major issue of concern for all Members. It is somewhat unfair that this motion refers to the jobs initiative as tokenistic. I cannot see what is tokenistic about a major reduction in VAT and PRSI rates for employers of low-paid workers. I doubt those paying for these tax cuts through the levy on their pensions would regard it as tokenistic either. The results from the initiative have also been promising which validate its direction and target. In the hospitality sector, the falling costs in VAT, PRSI and changes to the wage-setting mechanisms have resulted in a reduction in prices charged and, accordingly, an increase in tourists visiting Ireland. In the restaurant industry alone, it was recently announced it saw an increase of 500 jobs in just two months. Exports have grown, particularly in the high-value food area. This is all being underpinned by the drive to contain and reduce business costs.

I accept the motion's point that unemployment is our largest challenge as it is a real economic tragedy. If we do not stabilise the downward trend in employment, the reduction in spending power in the economy will simply reinforce this downward spiral. An unemployment rate at 14% means no family has been unaffected by the demoralising effect of unemployment.

Our economic recovery depends on a world recovery and Ireland being competitive enough to sell into that world. Regarding the latter, it is acknowledged Ireland has made progress in driving down costs. While achieving a world recovery is not in our control, preventing one is. The world financial crisis is at its most acute with market sentiment fragile and near to imploding. The last thing Ireland wants to do is be a catalyst for causing such an implosion. That is why I am surprised Members opposite call for burning the unguaranteed bondholders. I dearly wish when the bank guarantee was given in 2008 and when Anglo Irish Bank was nationalised in 2009, a stand had been taken to distance taxpayers from responsibility for those unguaranteed bonds. No one lobbied harder than Fine Gael to make that stand. However, conditions have changed. Ireland is in a bailout situation, a bankrupt country dependent on the lender of last resort as the Minister stated earlier. There are conditions to the bailout which must be observed even though we may not like them. Now, with the financial markets in such a fragile state, is not the time to renegotiate this. It is irresponsible to talk about burning the bondholders when one sees the contagion effect of a possible French bank meltdown arising from the recent suggestion that Greece may default.

Deputy Pringle referred to changes to the PRSI arrangements for self-employed people who lose their business. They must be afforded protection under the social welfare system. The JobBridge programme needs to be amended to cater for young graduates. Originally, the GradLink programme was to be incorporated into the internship programme, but few young graduates are eligible for the latter. We cannot forget about them and I would like to see the programme tweaked to allow some of them to avail of it. Young graduates, particularly science graduates, lose their skills quickly if they are not employed. Worse yet, they could emigrate. We cannot afford to lose them.

Gerald Nash (Louth, Labour)
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I welcome the opportunity to respond to the motion. The second paragraph lays an implicit charge of dishonesty at the Government's door. Even on a cursory analysis, this charge does not amount to much. It is more of the unfortunate, empty rhetoric and bogus claims we have come to expect from Members on the benches opposite, albeit with some notable exceptions.

From day one of this national Government, we have all set about the task of dragging the country out of the mire, as the Minister correctly stated. We have been up front and honest with the people about the scale of the challenge ahead. We have rolled up our sleeves and got stuck into the business of getting Ireland back to work. As we all know only too well, people have suffered from the recklessness of the banks egged on by successive Fianna Fáil Administrations. It is every Member's job to get the country back on its feet.

As Deputy Mitchell stated, the jobs initiative, the targeted cut in VAT rates and the decrease in PRSI charged on employers have led to shoots of recovery in, for example, the tourism market. Lest we forget, the number of visits jumped by more than 9% between May and July. GDP expanded by 1.6% in the second quarter of the year. An even stronger increase has been recorded on an annual basis. Taken with the first quarter's figures, last week's data show that a recovery is under way.

We extracted over the course of several weeks a significant saving on the bad bailout deal surrendered by the former Government last year, yet this annual saving of several hundred million euro to the people we all represent does not attract a mere mention from the Opposition. Everyday we battle to restore Ireland's reputation internationally. Arguably, this is working well. For example, last week Reuters stated: "Irish GDP jump offers rare euro zone bright spot". Last Friday, David Cottle of The Wallstreet Journal wrote: "Ireland achieving quiet success". The day before in the same newspaper, Eamon Quinn wrote: "Celtic Tiger purrs". These headlines were unimaginable a short six months ago.

Lest we need to be reminded, our sovereignty was pawned off less than a year ago. We are in what amounts to a wartime situation. We need more of the Churchillian spirit.

Peter Mathews (Dublin South, Fine Gael)
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Hear, hear.

Gerald Nash (Louth, Labour)
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What we get from the Members opposite is more akin to the constant cries of "We are doomed" by Private Frazer in "Dad's Army". I accept that the Opposition has a duty to perform. All I ask is that it do so constructively and honestly. Even a cursory perusal of the motion leads me to the sad conclusion that a large number of Members on the benches opposite, with some exceptions, inhabit what I would charitably call a solution-free zone. I do not doubt for one minute that Deputy Boyd Barrett and his colleagues are all concerned with the crisis of joblessness, but the 460,000 plus people who are out of work demand a sustainable recovery, sustainable jobs and realistic solutions to the problems they face. Many Deputies agree that none of the empty rhetoric in the House to date and in the coming weeks and months will pay the bills or feed the families of the people we represent.

Paudie Coffey (Waterford, Fine Gael)
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I welcome the opportunity to contribute on the Technical Group's important debate on unemployment levels. I respect the views of every Deputy, as every view is worth consideration, but we must propose realistic solutions.

I will correct the motion's flawed wording. For example, it names Waterford companies. While they have suffered job losses, not all of them have closed, which is contrary to what is stated in the motion. Waterford Iron Foundry is now Waterford Stanley and employs 120 people in the city. There is a great deal of spin-off employment in the various stores it supplies. My brother lost his job at Teva Pharmaceuticals last January, but it continues to employ 415 people in the city. The motion refers to the company as being closed. Despite the more than 200 redundancies at GlaxoSmithKline in Dungarvan, it still employs 570 people and maintains a presence in the constituency. While there have been a number of job losses in those companies, they have restructured. It is important that the Government does everything within its power to ensure that the remaining jobs are protected. Job protection is now as important as job creation.

The motion contains flaws. I am also disappointed by the small number of constructive proposals it contains. A negative motion, it offers no solutions to unemployment and takes cheap shots at the national internship scheme and the jobs initiative, which are getting people off the live register and returning young people to employment where they can gain experience that will stand to them and keep them in the workplace for the near future.

There is no magic solution to the problems we face. We must be realistic, accept that the country is on its knees and put our shoulders to the wheel to ensure it can recover and get back on its feet. The Government has inherited an economic mess. The legacy of Fianna Fáil Governments sees Ireland with unprecedented levels of indebtedness, a property bubble propagated by reckless policies, an unregulated banking sector and the erosion of competitiveness by unsustainable policies. Consequently, our international reputation has been destroyed. One of the first actions by the Government upon taking office was to get out there internationally to try to restore our reputation. We are beginning to see positive results.

In the mid to late 1990s when Fine Gael and the Labour Party were last in government, we were creating 1,000 jobs per week. We need to revert to the fundamental policies of job creation, sustainable employment and competitiveness. Unless we do so, nothing good will come of rewinding the clock two or three years to a false economy dependent on people selling properties to one another. Our economy has an annual deficit of €19 billion. We have a job to do and will do it with a social conscience to lessen the impact as much as possible. However, we need to balance our books and prove to international investors that we can do so. We need to regain control of our finances.

Last week, I attended an event at Merck Sharp & Dohme. It has made an additional €100 million investment in research and development. I was told by its general manager that, of the five pharmaceuticals it was developing globally, three were being developed between Clonmel, Waterford and Ballydine. Two were for insomnia and the third was for diabetes. Research and development is the type of sustainable employment that we need to encourage.

Recently, Bausch & Lomb invested more than €100 million in its plant in Waterford city. Genzyme, a pharmaceutical company employing more than 500 people, is celebrating ten years in the city and will invest more than €125 million in its expansion. Boston Scientific in the south east employs 575 people and is making an investment of €26 million.

Many Members of the Technical Group proposed in their election manifestos to raise corporation tax rates. If we did so, we could not sustain these levels of employment in large companies in the south east. We would drive many of those companies and jobs out of the country. Our proposals need to be realistic.

I welcome the attendance of the Minister of State, Deputy Perry. Small and medium-sized enterprises, supporting enterprises, research and development, innovation and indigenous industries, the potential of the agrifood sector and food sciences and exporting our expertise in these areas can be exploited to the full. We do not need to return to where we were two or three years ago. We need to return to where we were in the mid to late 1990s when we were creating sustainable jobs on a weekly basis and when our economy's fundamentals were sound.

Jim Daly (Cork South West, Fine Gael)
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I welcome this timely assessment of and opportunity for reflection on the Government's record to date. It challenges the record of our first six months in government, from what we have done to what some Independents perceive we have not done. Anyone who makes an honest assessment of the economy recognises the need for growth, as it is the only means of establishing stability, creating jobs and, in turn, repaying our debts.

If we cannot achieve economic growth, we will fail miserably in our objectives, as set out. Anything else is only a distraction from the truth and is not worthy of much further comment. The Government's record, as outlined by the Minister and others, stands on its own and does not need to be reinforced by me.

I take issue with the condemnation of the present Government. The motion condemns the "present Government" for "opting to make good the gambling debts of unguaranteed bondholders". I do not understand why the motion should condemn the "present Government". The problem is not the fault of the present Government.

Peter Mathews (Dublin South, Fine Gael)
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Hear, hear.

Jim Daly (Cork South West, Fine Gael)
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Any reasonable, honest assessment of modern history – we do not have to go back further – would recognise that the present Government did not opt to make good the gambling debts of unguaranteed bondholders. I ask the movers of the motion to recognise that. The Opposition should recognise the efforts being made by the present Government to deal with the repayments, including those we cannot handle and those we are challenged to deal with.

There is ongoing debate on the Anglo Irish Bank promissory notes that commit the State to pay in excess of €3 billion per year for the next ten years and some €17 billion in additional interest. This arrangement was signed off on by the previous Government, not the current one. Notwithstanding the actions of the previous Government, the present Government has set about, very successfully, renegotiating many aspects of the EU-IMF deal. Some of the best estimates to date on the actions that have been taken by the Minister for Finance show that up to €9 billion can be saved over the lifetime of the repayments. In addition, there is hope that the arrangement pertaining to the Anglo Irish Bank promissory notes can be renegotiated, and that a much better, fairer and more sustainable deal can be achieved by the Government.

Peter Mathews (Dublin South, Fine Gael)
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Hear, hear.

Jim Daly (Cork South West, Fine Gael)
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I hope that will happen. It is not for us to aspire to defaulting. This is not a starting position from which a Government can set out. What we can do is make our debts more manageable, have a sustainable economy and deal with the real issues. There is a money system, we bought into it and must move with it. We rely on the funding of the ECB and, therefore, telling it we will not pay our debts will not get us out of the hole we are in. We have achieved savings of nearly €7 billion through agreements with junior bondholders. These are very significant changes by any standards.

Consider the phrase, "honestly deliver on its commitment to 'Get Ireland Working'". I do not know why there should be a reference to honesty or dishonesty. The wording is peculiar, to say the least.

Many in the Technical Group have argued against austerity and stated it is not a good measure. The opposite to austerity is what we had, and it was exemplified by the Bertie Ahern and Charlie McCreevy schools of economics. These got us into the position we are in and are certainly not the solution. Austerity is good provided it is equitable and targeted equally at all those who can bear it most.

We can be either a forward-looking, strong, competitive country with a positive attitude or a negative country that desires to default. I began by saying growth in the economy is very important and that we need to inspire confidence in the economy. The negativity from the now absent Technical Group is not helpful, constructive or positive. It will not get us to where we need to be.

Willie O'Dea (Limerick City, Fianna Fail)
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I thank the movers of the motion and welcome the opportunity to say a few words on the matter. I could not help being struck by the last speaker's contribution in which he said he did not want to take us back to the era of Mr. Charlie McCreevy and Mr. Bertie Ahern. Perhaps he would like to take us back to the era of Garret FitzGerald, which was such a resounding success.

Paudie Coffey (Waterford, Fine Gael)
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We had to fix that mess after Fianna Fáil's term in office also.

Willie O'Dea (Limerick City, Fianna Fail)
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This year, more than 3.1 billion will be at work in the world at large. This is a greater number than ever before, yet there is a pervading sense of crisis over jobs. This is because there are now 205 million people officially unemployed in the world. A high percentage of these are under the age of 25. It is often overlooked that the quality of the jobs available seems to be in decline, especially for routine white collar workers in rich countries. This country is no exception to what is happening in the rest of the world. More than one in every seven jobs, or approximately one in six, created during the Celtic tiger era has disappeared in recent years. Official unemployment is now edging towards 15%, which figure does not count people on schemes, those who have gone back to full-time education because they cannot get a job and, more important, people who are emigrating. The Department of Finance estimates that net emigration between April 2010 and April 2012 will reach 120,000. If anything, this is understated.

Approximately 15,000 fewer people are at work than in the last quarter of 2010. One in every three people under 25 is out of a job. What is most significant is that more than one in two unemployed people, or effectively 60%, have been jobless for more than a year. That is scary. Just two years ago, that figure was only one in five.

Peter Mathews (Dublin South, Fine Gael)
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Why is that?

Willie O'Dea (Limerick City, Fianna Fail)
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The devastating human, social and economic consequences of long-term unemployment need no elaboration. It is very difficult for an individual who has been unemployed for more than 12 months to get back into the workforce. It is very difficult and costly for the agencies of the State to get that person back into mainstream employment. There have been a number of studies on this, all of which have come to the same conclusion. The most recent detailed study of the recession and job losses suffered in Japan, published last year, found those who experienced long periods of unemployment in their early careers now account for almost 60% of cases of severe and chronic depression in the country, often leading to suicide or attempted suicide.

Ireland is relying on exports, but exports are very slow burners when creating jobs. The Minister extolled the success of the Government in regard to exports. Statistics show we have recovered about 75% of the export market we lost during recent years, but global volumes of trade have returned to their pre-crisis peaks, which means we have actually lost market share. It gives me no pleasure to say the export figures for July show a very significant downturn, which is extremely worrying. That is due to the economic ill-health of our trading partners, which I freely acknowledge. The Members on the other side of the House, who used to sit here, never acknowledge that. We have a small, open trading economy, as all speakers on the Government side have said, and naturally our performance depends on the economic health of our trading partners.

As acknowledged on all sides of the House, there are steps we can take. It is true we have regained some competitiveness since 2008. That said, many cost increases have been as a result of cyclical rather than structural factors, for example, subsidies for major energy consumers and currency fluctuations. The problem is that if the structural barriers preventing costs from adjusting to lower growth are not removed pretty quickly, recent competitiveness gains will be rapidly eroded once the economy starts to recover. Given Ireland's reliance on trade and the open nature of its economy, international cost competitiveness is a crucial determinant of our economic well-being.

The Government has identified all the areas where it needs to take action pretty urgently in this regard. We read about the impending legal services legislation, in respect of which there are reported divisions in Cabinet. I hope that is not correct. Although the areas of energy costs, utilities costs, rent, rates, insurance, and so on have been identified clearly, we are still awaiting action. I hope that, having given the Government a fair period of grace over its first seven or eight months, we will see early action on many of these fronts.

There is also the question of credit. There is a credit famine in the country and we discussed this matter today at a meeting of the Joint Oireachtas Committee on Jobs, Social Protection and Education. We were told one can appeal to a credit review committee but when we asked the departmental officials how many cases had been referred to this committee we were told the number was 100 cases, which is laughable, and that 30 of them were successful. This is a drop in the ocean. The fact is a credit famine exists.

I realise the Government has heavily recapitalised the banks, and the banks are now in a position to extend lending to business at a realistic level. However, they are not doing so. The Government has announced two impending initiatives - it has been announcing them for the past eight months and I hope we will see them shortly - which are the micro-finance initiative and the partial credit guarantee scheme. The figures we have heard they will cover are minuscule and are just the tip of the iceberg. Recently, I spoke to business people in the UK, which has a far more extensive partial credit guarantee scheme, and it is not working. The UK is experiencing exactly the same credit problems for businesses as are experienced here.

There is much we can do with regard to innovation in areas such as digital games, cloud computing and life sciences. The Minister of State, Deputy Sherlock, has pointed out to us on many occasions that programmes exist which trundle along but there now needs to be a step-change in how we approach these matters. I know of many SMEs which, because the domestic market is flat, have been trying to break into the export market but no assistance or encouragement is available for them. There is no mentoring or organised system for receiving advice. We should consider a MABS-type system for small businesses. It is in the Government's power to take various other initiatives at relatively little cost.

I will not get into a debate on the effectiveness or otherwise of the jobs initiative. All I will state is that it had some effect, particularly in the sectors of the tourism industry at which it was targeted, but the sad reality is that unemployment has increased by approximately 25,000 since the jobs initiative was announced. We all know that finance for the jobs initiative was secured by raiding private pension funds.

The centrepiece of the jobs initiative is a reduction in VAT. I was the first person to reply for the Opposition when the jobs initiative was announced, and I stated in so far as stimulating the economy was concerned a number of studies indicated that a scatter-gun VAT reduction is the worst way to go about it. I quoted the experience of Gordon Brown's Government, which was the previous Labour Party Government in the UK, which reduced VAT substantially. The result was disastrous; it created no jobs and plunged the country further into debt. We have not plunged ourselves further into debt; we have plunged private pensioners who have been saving for years further into debt.

If we are to get a grip on the problem and take action which is in our own power to take - I recognise all of this is heavily influenced by world factors such as what will happen to the euro - we must look to the next budget for a far more radical approach than the approach we have seen to date from the Government.

Timmy Dooley (Clare, Fianna Fail)
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I thank the proposers of the motion for giving us an opportunity to discuss what is one of the most important issues facing the Government and the House. It is right at this stage that we have a general review of the jobs budget or jobs initiative - I will not get into parsing the words. What was sold at the time of the election was that when the now Government parties came to power they would introduce appropriate measures, bring a budget before the House within a set number of days and set about resolving the jobs crisis.

Deputy O'Dea referred to the jobs initiative, has largely been a failure. The Government pinned much of its activities, resources and efforts on the tourism sector at a time when that sector was recovering. The Government set its targets against one of the lowest levels tourism had seen for many years, largely influenced by the ash cloud which occurred the previous year and which had skewed numbers completely off target. It would be a trick to suggest that growth rates in excess of 10%, 12% or 15% would be the result as that was happening in any event. The extent to which the VAT reduction in particular has had on activity is marginal. To boil it down, the simple fact of the matter is that the 4% reduction in VAT on a meal for two would not pay for a cup of tea for one afterwards. This is the minuscule effect it has had on the tourism sector.

As Deputy O'Dea stated, the measure will remove €800 million from the pockets of pensioners over a full year period. These are people who genuinely spend money, but if they are frightened and uncertainty is created about their future they will not spend. It is my view, and over time statistics will bear this out, the net effect of transferring wealth from pensioners to the VAT reduction will be a destabilising effect on the economy, because money is being taken from those who spend. A little confidence would have allowed these people to continue to plan for their future and spend as they always have done. This is a real issue.

During the course of the election campaign, the Government parties attacked the previous Government for the introduction of the travel tax. We had reduced it to a relatively nominal figure and were using it to support and promote the activities of Fáilte Ireland and Tourism Ireland with regard to attracting inward investment. The Government parties stated they would abolish it, set about doing so but have so far failed in the attempt. It has failed to achieve success with the airlines and has failed to convince them of the necessity to attract greater tourism levels. It has failed to meet their demands and needs.

I have sat on the other side of the House and I accept airlines are difficult to deal with, particularly one which is among the largest in Europe. They do not negotiate easily and they certainly do not assist governments. The Government parties seemed to be on their side when they were on this side of the House and made it sound very plausible and easy, that all the airlines needed was tender loving care and, lo and behold, the bedrooms of Ireland would be filled with tourists from overseas. The Government has not succeeded in doing this. It would be nice if we had a little humility and acceptance with regard to the issues that have had to be faced.

I will remind the Government of the historical context in which it fought the election and what was included in the programme for Government. There was much talk about the strategic investment bank, which would be the panacea to create jobs. I have not heard much about it recently. The Government has spoken much about banking and the implementation of the banking strategy we put in place-----

John Perry (Sligo-North Leitrim, Fine Gael)
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Some legacy.

Timmy Dooley (Clare, Fianna Fail)
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-----with which we faced the electorate and for which we suffered the wrath of the electorate. The present Government has continued to implement it and rightly so because it is the only solution. I know Deputy Mathews will have a different view when he speaks on this matter. Where has the strategic investment bank gone? It was going to resolve the jobs crisis and help the Minister of State, Deputy Perry, who I know is very committed to creating jobs in small enterprises-----

John Perry (Sligo-North Leitrim, Fine Gael)
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It is all happening. Give it time.

Timmy Dooley (Clare, Fianna Fail)
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He is a great man in this regard, but we have no strategic investment bank to help small enterprises.

Peter Mathews (Dublin South, Fine Gael)
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It is on its way.

Timmy Dooley (Clare, Fianna Fail)
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I am concerned about this.

Then we had NewERA, which would create, depending on who one listened to-----

Willie O'Dea (Limerick City, Fianna Fail)
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The Government is creating minus jobs.

Timmy Dooley (Clare, Fianna Fail)
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In fairness, since the Minister, Deputy Noonan, took office he has been sceptical about it.

John Perry (Sligo-North Leitrim, Fine Gael)
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Deputy O'Dea was 14 years at it.

Timmy Dooley (Clare, Fianna Fail)
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The Government pushed it out there and stated 105,000 jobs-----

Jim Daly (Cork South West, Fine Gael)
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Will we go back to property?

Timmy Dooley (Clare, Fianna Fail)
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We have seen a reduction in the levels of employment since the Government came to power and the jobs budget was announced and there is no sign of NewERA. Government Members come here and trot out the notion that somehow one could not burn the bondholders despite the fact the Government parties stated they would do so and that they would have a different approach to banking-----

Jim Daly (Cork South West, Fine Gael)
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We support burden sharing not burning.

Timmy Dooley (Clare, Fianna Fail)
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The shareholders were well burned; the Government did not have to do that. Ask anyone who had a few bob invested. The shareholders were gone.

The Government somehow suggested the guarantee was the root of the problem. However, €3 billion of unsecured debt is sitting in Anglo Irish Bank which is not covered by the bank guarantee to which the Government accuses us of signing up.

Peter Mathews (Dublin South, Fine Gael)
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Who holds the gun to Ireland's head?

Timmy Dooley (Clare, Fianna Fail)
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If the Government so wished it could burn those bondholders in the morning.

Jim Daly (Cork South West, Fine Gael)
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Is that what you propose? Is that Fianna Fáil policy?

Timmy Dooley (Clare, Fianna Fail)
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The Minister for Finance went to the United States and spoke about it. He got as far away as he could from Frankfurt and then issued the threat. When he went to Mr. Trichet and put his hands up and said he knew he could not do it and that it was dreadful. The Government does not have coherence to its argument even when it is in power, and it certainly it did not have it when it was in opposition.

I am disappointed because there are so many inconsistencies in what I have heard but I am sure there will be other opportunities in the course of the debate to set the record straight.

Michael Kitt (Galway East, Fianna Fail)
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I am delighted the Deputy knows he is out of time.

Sandra McLellan (Cork East, Sinn Fein)
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I move amendment No. 1.

Michael Kitt (Galway East, Fianna Fail)
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The Deputy cannot move the amendment but she can speak on it.

Sandra McLellan (Cork East, Sinn Fein)
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I welcome the opportunity to speak on the motion this evening. I commend the Technical Group on bringing the motion before the House.

Jobs, the lack of jobs and our efforts to create and retain jobs are issues that have a real impact on the lives of ordinary people right across the State, whom we know are struggling. The political choices made by successive Governments have ensured that. In truth, we have a crisis, which this Government thinks it can cut its way out of. The austerity measures being planned by the Government, and prescribed by the previous one, have resulted in hundreds of thousands of people being unemployed and wondering which bills to prioritise: the weekly grocery bill, the visit to the doctor, the child care fees, the ESB bill, the gas bill or the back to school fees, including uniforms, transport, books and registration, not to mention the rent or mortgage. Many people now find themselves in a situation where they have no disposable income at all. Many are faced with having to make a choice as to whether to call a plumber, visit the doctor, pay house insurance or simply to put food on the table.

While the Government dithers around the edges with a jobs budget-cum-initiative, more and more people are being dragged under the water. Having more than 470,000 people out of work is a national emergency. A total of 60,000 young people emigrating is a moral disgrace. It cannot be allowed to continue. Our best and brightest are boarding planes and ships on an hourly basis. We are losing a generation of bright, energetic and gifted young people because of a lack of action on jobs. We need real and meaningful solutions.

It is time for the Government to re-evaluate its course of action. It is time for it to get its priorities straight, to get this country back on its feet and to start to make the right choices for the people of this State. People want to work. They have a right to work. Article 15.1 of the EU Convention on Human Rights tells us that we have a right to engage in work and to pursue a freely chosen or accepted occupation. This country needs a job creation and stimulus package if we are to fulfil these obligations. We must provide people with opportunities. Successive Governments have failed to do that. They have consistently relied on short-term measures which we all knew were destined for failure.

Sinn Féin warned that the construction sector was over-inflated. We demanded pre-emptive intervention for workers in vulnerable sectors of the economy. We warned that economic growth was being driven by domestic consumption rather than exports. Nothing was done. There is an epidemic of wrong choices and inaction in this country when it comes to job protection and creation. Small and medium enterprises need to be able to access money. They need to be able to access credit. We need them to be able to get paid. There is without doubt a better way to protect and save jobs.