Seanad debates

Wednesday, 23 February 2005

5:00 pm

Tom Morrissey (Progressive Democrats)

The consistently positive news on employment in Ireland each quarter is no surprise given the favourable economic environment which the Government has created for economic growth and employment opportunities. Over the past seven years, in excess of 500,000 jobs have been created. The total number of persons employed is just short of a record 1.9 million. This equates to one person working for every two people in the economy.

Ireland's performance in employment terms is the envy of Europe. Our unemployment rate fell from 15.7% in 1993 to just 3.6% in April 2001. It is now 4.4%. The most recent figures for the EU member states show Ireland's unemployment rate at 4.4% compared with an EU 15 average of8%, placing Ireland second only to Luxembourg. There is no doubt that current Government policies are contributing to Ireland's strong labour market performance. The Irish economy has been growing strongly for most of the past decade and has been at the top end of the European growth league, at least in the context of the 15 countries in the EU.

There are a number of elements whose combined effect in the past decade or so has generated Ireland's exceptional employment and economic growth performance. These include low corporation taxes; the enhanced education status of the workforce; an increase in the labour force and reduction in the dependency ratio; the fiscal rectitude stance adopted by the Government and the favourable industrial development policy which successfully targeted multinationals in high growth sectors; social partnership which helped restrain wage growth in return for lower taxes; and increased competition in a number of important sectors, notably retail, telecoms, energy and air travel.

As a result of the Government's economic strategy, Ireland's GNP per capita is now in line with the EU average. It is imperative that future economic policy continues to focus on reducing joblessness and getting people back to work. There is no room for complacency in these figures. Much more remains to be done. Of the 94,000 people unemployed in July 2004, 46% were aged between 20 and 34 and a further 16% were aged between 35 and 44.

The one downside of our unemployment rate is that a tightening labour market gives rise to accelerating wage growth which drives business costs higher and results in higher inflation. However, there is some consolation in the recent population and labour force projections produced by the CSO which sees the labour force increasing by 40,000 to 50,000 per annum over the period to 2011.

As somebody who has employed foreign direct labour through the permits system, I welcome the introduction of the permits Bill. It would be a great help to small businesses if language training were provided for those people who come here. There is a deficiency in this area at present.

Despite the positive news on employment there remain weaknesses in the economy that have the potential to constrain economic and employment growth in future. Government policy needs to focus on two issues; our physical infrastructure deficit and competitiveness. We will create jobs in the economy only if firms and businesses are in a position to export to international markets. Ireland is one of the most open economies in the world. Our international players will survive if their cost base is in line with or lower than their international competitors. When one examines unemployment rates in Ireland and across Europe, one must conclude that a socialist Europe is an unemployed Europe.

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