Joe O'Reilly (Fine Gael)

I am sure he will generously accept that.

It is worth noting the gravity of the situation with which we are confronted in regard to unemployment. The live register is currently at 244,500, or 6.3% of the population. We have an unemployment rate which is higher than that in the United States, Britain, Japan, the Netherlands, Denmark, Norway, the Czech Republic, Switzerland, Poland, Singapore and South Korea among others. The ESRI predicted last week that unemployment will reach 8% in 2009. The number employed directly by the construction industry — this is a critical issue — fell by 17.9% from August 2007 to August 2008. Between the beginning of 2001 and 2007, Ireland's cost competitiveness against our trading partners has worsened by 35%. Goods exports declined by 6% and manufacturing employment declined by 9%. That is the backdrop to what we are discussing and it is extraordinarily serious.

It is unfortunate to note that yesterday's budget, rather than rectify the difficulty, will contribute to the problem. The budget will drive down consumer confidence because of the increased tax rates. The 1% levy on those earning below €35,000 is a horrendous disincentive to going into the employment market and it is a penal tax on work. Imagine a home help travelling from house to house keeping people out of institutional care looking at the prospect of a 1% levy on his or her income. I appeal to the Minister to amend the Finance Bill to deal with this. People will have less money to spend as a result of the budget. There will be less cash in circulation with an obvious knock-on effect on business.

The cut in the local government fund will put more pressure on local authorities to raise rates on businesses and make up the funding shortfall in this way with a consequent domino effect on employment. The Fine Gael party is opposed to this. The €1 billion budget for FÁS is maintained in the budget, but there is no mention of reform or streamlining. We need to be better placed to retrain people in our rapidly changing labour market.

Another misconception in yesterday's budget relates to a matter to which I referred at some length during debate yesterday. Yesterday's budget suggests the capital spend on the schools building programme is increased. This is not the case. It will change from €285 million this year to €281 million next year. The reason there appears to be an increase is that the Minister included the third level capital programme in his figures. Therefore the budget for the schools building programme has decreased in net terms. This is critical because the schools building programme at primary and secondary level, particularly at primary level, offered the Government a wonderful opportunity to deal with the unemployment issue, particularly in the construction area.

I suggest the Minister should re-examine this matter. If, for example, he considers the cost of prefabs on school grounds, the cost of unemployment assistance for people displaced from the construction industry and takes on board that he can get good value for money on tenders and contracts from local builders if he uses the Department of Education and Science devolved grant scheme and that there would be a return in VAT to Revenue, the net cost of building a primary school could be very low, resulting in wonderful social and capital advantages for society. The Minister lost the opportunity to do this in the budget. When the detail of the Finance Bill is being worked out, the Minister should seriously consider using the schools building programme to create employment for unemployed construction workers.

A person must be 12 months unemployed before being eligible for the back to education allowance. This is an insane bureaucratic anti-employment and development requirement. The sooner a person dislocated from employment can be helped return to education — there is potential to get an extra 6,000 people back into education — the more immediate the implications for improving the life of that person and the economy, ultimately saving in welfare payments. The eligibility requirement therefore should be reversed and I appeal to the Minister to respond positively in this regard. Retaining the 12-month requirement commits people to continued unemployment and demotivates them rather than inviting them back to education when still in a reasonable psychological state. This must be addressed. I suggest to the Minister that the back to education allowance should be increased because there is great potential in that.

There is also great potential for the creation of employment in the green area. We must have immediate retraining for unemployed construction workers. The first objective should be to redeploy them on a school building programme, on worthwhile capital expenditure or development. The Minister remarked that he saw merit in the community employment scheme and I commend him on that. I agree with him as that scheme has done great good for the country. However, I would like to see the community employment scheme expanded. I am concerned about the three-year cap on community employment. I am not sure there is logic in allowing people to work for only three years before letting them go. People should be allowed remain on the scheme, but there should be continued efforts to bring them into the mainstream workforce. It is wrong to sentence them to a third rate existence by removing them from the community employment scheme after a few years, just when they are beginning to feel empowered.

While community employment and redeployment of construction workers have a vital role to play, we should seize the potential of green energy development and the green economy to provide employment to displaced people and to create new employment. There is immense potential for retraining in this area. People could be involved with energy audits in buildings and houses, with wind energy projects and with implementing alternative energy sources. It is a pity the ESB is allowed continue to prevent the wind energy sector from supplying new green energy to the grid. It should be much easier for small groups of farmers to come together and create a co-operative for wind energy development. It also should be easier for industry to have its own micro wind generator. These areas should be examined and the ESB should be challenged on its monopoly and competition created.

The Minister of State must return to the Government with the opinion of the Seanad that an opportunity was missed yesterday in the budget to deal in a positive sense with the unemployment issue. There is too much acquiescence and acceptance of unemployment here and not enough effort is made to think outside the box. We must think outside the box on the matter of school buildings, green energy, retraining and back to education. We must also think outside the box with regard to putting a penal levy on the lowest paid, which is a disincentive to wanting to be in employment. The Government must change in this regard.

The Government must be aware we no longer have the safety valve of emigration to deal with unemployment. I have no empirical findings on this, but, anecdotally, the only country with potential for employment is Australia and it has a quota system in place and immigrants must have specific skills. The option we had in olden days, when we could dump the problem onto our neighbour, no longer exists. We will have to cope with unemployment within the country. The welfare of the human beings involved is a significant issue. There is potential for social revolution in the country if we do not deal with unemployment. We must recognise that the nature of our unemployed has changed and they will not be as docile as they were in the past.

I appeal to the Minister not to miss the opportunity to take on board my suggestions about back to school education, green energy, school buildings and the disincentive to work at the lower end of the spectrum. The Minister must consider imaginative ways to deal with unemployment. I thank the Chair for his indulgence. This is one of the most serious debates this House will have for some time.