Ciarán Cannon (Fine Gael)

I move amendment No. 1:

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

"notes the limited job subsidy proposal put forward by Government will have little impact on Ireland's labour force and recommends a suite of job creation and protection packages such as PRSI breaks for new employees, a lower rate of VAT, the abolition of the damaging travel tax and the implementation of a modern infrastructure investment stimulus package to create 100,000 jobs over the next four years."

I thank my colleagues in the Green Party for putting forward this motion. It gives Members a valuable opportunity to debate and discuss what is undoubtedly the biggest challenge ever faced in this country. Senator Dan Boyle asked that we approach this in a collegiate manner, but I challenge him to cite a single instance in the past year where the Government has taken on even one suggestion made by the Opposition and implemented it.

Unemployment is a terrible blight on our society. It saps morale and erodes the dignity of our people. However, Ireland has managed to cultivate a unique version of this blight and it will be extremely difficult to eradicate. There are now almost 420,000 people unemployed and that rate of almost 12% compares quite badly with other countries. Senator Dan Boyle referred to Spain and Germany as being slightly worse off than this country but in the UK unemployment is heading towards 8% while in New Zealand, a country with similar circumstances to Ireland's, it is hovering between 5% and 6%. The CSO figures produced today show that the number of people signing on in June was almost 90% higher than in the same month last year, the biggest increase since records began in 1965.

Of course, every reasonable person would have to agree with the central tenet of the Green Party motion, the urgent need to implement measures aimed at slowing and reversing unemployment. Our economy is in freefall but where is the urgency in the Government's efforts to stem the jobs haemorrhage? The alarm bells were ringing loud and clear in March last year when unemployment reached levels not seen since September 1999. However, it was 15 months before there was any concrete proposal from the Government to intervene in the crisis. Two budgets were introduced and a panicking Government could only offer unimaginative tax hikes and a new VAT rate that drove shoppers north of the Border, wiped out even more jobs and left us down €700 million in VAT revenue.

Senator Dan Boyle referred to the 1980s and spoke of how he does not wish to revisit them - none of us does. My mother is a teacher and I recall her coming home from work, opening her pay and being utterly distraught and, at times, moved to tears by the punitive tax rates. We are beginning to head in that direction again and we must be careful in that regard.

On 24 June the penny finally dropped and, with much fanfare, we heard the half-hearted proposal to perhaps spend up to €1 billion on a jobs protection scheme. A week later, another 800 jobs are gone and there are no further details of the proposal, no specifics of any kind and certainly no mechanism in place to assist employers in retaining workers. Contrast this inaction and paucity of ideas on the part of the Government with the many initiatives suggested by Fine Gael in recent months. Fine Gael recognises, for example, the immense difficulties being faced by our small to medium sized enterprises, the backbone of our economy, which employ 800,000 people. These businesses need real and tangible support measures that can be implemented immediately.

Last year, Fine Gael proposed that employers who take on additional employees should be exempt from paying employer's PRSI for at least two years. With job losses set to continue, we now suggest that an employer who takes somebody off the dole and into a new job be able to claim a wage subsidy. This would be worth €6,000 and would be paid over two years. The wage subsidy would work in the same way as a PRSI exemption but would give employers more flexibility by allowing them to front-load the benefit.

It has long been recognised that the Government is the main culprit in driving up business costs. Central Government, local authorities, Government agencies and regulators have increased the administrative burden and increased charges, levies and taxes much faster than the rate of inflation. Businesses have been hit hard by rising fuel and utility costs, rising labour costs, increased local authority rates and charges for refuse and water. For decades, local authorities used the rate of inflation as a benchmark for increases in local authority rates. Ireland is now experiencing deflation, yet no local authority has cut rates. Fine Gael proposes to freeze all Government charges that apply to business and to freeze local authority rates for five years.

The cost of electricity to Irish businesses is the second highest in Europe, according to EUROSTAT, and gas costs considerably more here than it does in the United Kingdom, the place from where we purchase most of our gas. These high operating costs deter energy intensive companies from investing in Ireland. Last year, an IDA Ireland business attitude survey reported that businesses in Ireland found energy costs a significant negative in operating in this country. With all this knowledge available, the Government has dragged its heels in reducing energy costs and its regulatory system for energy is deeply flawed. The time has come to radically reform this system. First, there should be an immediate review of electricity and gas prices. The Commission for Energy Regulation has indicated that energy prices will be reduced in October. We will be haemorrhaging jobs from now until then at the rate of between 800 and 1,000 per week. If that is the position, why can energy prices not be reduced now? By October it might be too late for many businesses. Instead of fixing prices, the commission should set a price ceiling and let real and healthy competition occur in our energy market.

On Friday, 13 March, the Minister for Finance, Deputy Brian Lenihan, finally admitted that the recent VAT increase was a major mistake and that it had cost this country €700 million in lost revenue. Some weeks earlier his colleague, the Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, had described the increase as "a total disaster". While this newfound honesty from Fianna Fáil is to be welcomed, it still remains a mystery why the Government has refused to reverse that VAT increase. In our recent pre-budget document, Fine Gael proposed to reduce the higher rate of VAT from 21.5% to 21% and the lower rate from 13.5% to 10%. Was there a two-way street or collegiate approach? No, that measure was not taken on board.

Tourism in Ireland is worth approximately 4% of GNP per annum. Receipts from overseas visitors now top over €4 billion per annum. In January this year the CSO published new statistics on tourism numbers. They were very stark reading. In the year to November 2008, 156,000 fewer British visitors came to Ireland and 63,000 fewer visitors came from the US and Canada. There were 12% fewer trips to Ireland in November 2008 compared to the same month in 2007. How did the Government confront the challenge of dwindling tourist numbers? It imposed a €10 travel tax on everybody visiting the country. How did other countries react to decreasing tourist numbers? Belgium scrapped its travel tax, Greece reduced its regional airport charges to zero, Holland repealed its €12 per head tax and Spain announced a zero rate of airport tax for every airline that maintained its current level of traffic.

This is an enormous opportunity and challenge for Ireland. Growth in electronically delivered services across advanced telecommunications networks will dramatically outstrip growth in traditional trade in manufactured goods and agriculture. Every goal that Fine Gael has outlined in recent months is achievable. This country needs a long-term vision, a vision the Government seems to be incapable of producing. The Irish people will only react to real movement on the part of the Government. Life happens at the level of events, not of words, and the time for talking is over.