Dara Calleary (Mayo, Fianna Fail)

I thank the Members of the Seanad for taking the time to discuss this vital question. I have taken a good deal of note of the discussions, especially in the past hour. As Members are aware, the purpose of the exercise is to discuss the measures the Government has introduced to protect existing employment, assist those who have lost their jobs and improve Ireland's economic competitiveness. Earlier the Tánaiste took the House through the Government's key policy initiatives in these important areas, when I again listened with interest to the inputs of Senators.

I welcome the views of both Houses of the Oireachtas as I firmly believe that by discussing how to address these issues properly, we can best plot the course that will take us out of these difficult economic times. Ireland is one of the world's smallest and most open economies. As such, our economic fortunes are inextricably linked to the performance of the world economy. While over recent decades we have witnessed a remarkable transformation, it must be acknowledged that this was driven not only by domestic policies but also by the strength of the global economy.

We are all aware that the entire global economy is in a period of sustained and unprecedented challenge. Virtually every economy in the developed world is struggling to cope with the global economic storm which is being exacerbated by credit constraints and prolonged by a decline in consumer and investor confidence. One need only look at the experience of our fellow Europeans and the significant increase in average unemployment in the eurozone, which rose to 10% in November 2009. As Senator Bradford has just mentioned, we have also witnessed the continuing struggle to improve the unemployment situation in the USA, which has had ramifications again this week.

Given the openness of the Irish economy, it was inevitable that we were always going to be adversely affected by the global economic downturn. However, it is equally true that our economic performance has been exacerbated by structural difficulties within the economy as well as by the loss of competitiveness we have experienced vis-À-vis our competitors in recent years. The Government is determined to do everything in its power to ensure the economy returns to growth and that it is based on a more sustainable footing in the future. To do this we first have to stabilise the current economic situation and in this regard we have introduced a range of measures to lay the foundation for a return to prosperity. The Government has repeatedly proven itself capable of taking the necessary steps to safeguard the economy. Over the past 14 months we have taken difficult and painful decisions that would have been unthinkable three years ago. We took these decisions because they needed to be made in the long-term economic interests of the State. Other countries in a similar difficult position to Ireland have struggled to show the same degree of flexibility and maturity that the Irish people have displayed in facing up to their economic crisis.

While I acknowledge that these decisions have been difficult to accept, I believe they will facilitate Ireland's return to economic growth and place it in a strong position to benefit from any improvement in the world economy. As has been stated, the measures introduced by Government have been recognised by the OECD and a range of other international bodies as being significant in addressing the challenges we face.

We must continue to pursue appropriate policies to position the economy to benefit from such global recovery when it emerges. We need to remove the uncertainty within the economy and restore the confidence of businesses and individuals, such as the people Senators Carty and Brady referred to earlier. As Senator Bradford indicated, we have adopted three difficult and very painful budgets aimed at restoring the State's finances and this process will continue until we have succeeded.

We need to adopt measures that will enable the economy and our enterprises to sustain that recovery. I am acutely aware of the distress the economic downturn is having on individuals, families and businesses. The negative consequences of that downturn, particularly where jobs are lost, cannot be overstated. Our priority has been and will continue to be, to respond to the specific problems. I am committed to supporting enterprise and job creation and providing the necessary activation measures, training and upskilling programmes, with a renewed focus on targeted delivery. We are not simply doing the same with less. We are doing things in a more focused manner and targeting our spend on productive thoughtful investment that will have a clear return for the Exchequer and the economy.

Today's discussion should be seen in that context. Our present high unemployment rates reflect the reality that in the past we lost our competitive edge in certain areas of the economy. In order for us significantly to address our unemployment rates we need to improve our competitiveness, which will in turn see an increase in employment creation thereby bringing down unemployment.

The Tánaiste spoke earlier about measures the Government has introduced to stimulate export growth, as this sector will be the key driver of our economic performance in the short to medium term. We have already witnessed increases in our export levels and these will only increase once the world economy is fully on the path to recovery.

We have also introduced the employment subsidy scheme and the enterprise stabilisation fund. Those initiatives are designed to provide financial support to enterprises in these difficult times. The employment subsidy scheme is designed to assist vulnerable but viable enterprises in retaining employees they may otherwise have been forced to make redundant, by providing a subsidy to them. Applications to the second call, which closed on 23 December 2009, are currently being assessed. It is expected that the scheme will support approximately 80,000 jobs, both directly and indirectly.

In addition to providing such support directly to enterprises, the Government remains committed to investing significantly in research and development and the continued development of our economy into a knowledge-based one. This will enable us to move up the value chain, but more importantly it will result in higher skilled jobs and will increase the demand for highly skilled individuals.

This brings me to our greatest natural asset – our labour force. For years we have had a labour force that is both flexible and highly skilled. Successive Governments have invested significantly in the education and training of Ireland's labour force and as a nation we have benefited considerably from that investment. Despite the difficult financial circumstances, this Government continues to recognise the need to invest in the skills and competency development of our entire labour force. This investment will ensure that we possess the skills to meet the needs of our increasingly knowledge-intensive economy.

Given the rise in unemployment, the Government has redeployed substantial resources towards the training and education of those who find themselves out of work. For instance, this year my Department will invest €781 million in the provision of FÁS training and work experience activation places for the unemployed. This additional investment has enabled FÁS to expand its capacity for the unemployed substantially and it will provide approximately 147,000 training and work experience places this year. Compared to the 66,000 places which were provided in 2008, one can clearly see the scale of the increase in my Department's provision.

The bulk of this additional provision has been due to the increase in training places for the unemployed. FÁS now provides modular-based training so participants can pick which modules they most require to improve their skills and ultimately increase their employability, whilst maintaining a close link to the labour market. In addition, we are responding to the new unemployed by delivering training courses in innovative formats such as on-line, blended learning and night courses. In this way we will enable more people to access the services of FÁS in addition to the traditional classroom approach.

Given current circumstances, it is vital that training courses being provided by FÁS meet the current and projected skills needs of enterprises. That is why FÁS takes into account the conclusions and recommendations of our expert group on future skills needs. The latter body advises the Government on future skills needs of the economy, in the design of its portfolio of training programmes for the unemployed.

The current difficulties being experienced by FÁS are being addressed by a number of Oireachtas committees. I am pleased to inform the House that this afternoon the Tánaiste will announce a new board for the FÁS agency, which will direct its new approach to the delivery of courses.

The substantial increase in education and training provision, which is a direct response to the economic crisis, is also a key in achieving the objectives of the national skills strategy, which is to upskill 500,000 people by at least one level on the national framework of qualifications. The additional provision now being provided will enable more individuals to progress up that national framework in accordance with the national skills strategy.

In addition to these initiatives, we have introduced a number of new programmes designed to assist the unemployed. For instance, the work placement programme provides 2,000 individuals with an opportunity to stay close to the labour market while they are unemployed. Participants on the programme gain work experience for a period of up to nine months while retaining their social welfare entitlements.

The Government has announced a new labour market activation fund of €20 million for which we will issue calls later this year. This fund will be targeted at certain cohorts of the unemployed, including the low skilled, under 35s and those suffering from what is termed structural unemployment. It will be used to support innovative proposals to provide these individuals with training that is designed specifically to assist participants in securing employment. My Department has responsibility for the fund and will shortly issue a call for proposals from all sectors of society.

The increase in training provision, work experience opportunities and the call for these innovative proposals are all designed to provide an enhanced offering of support to all of the unemployed. Through these measures individuals who are unemployed can improve their skills and competencies, thereby assisting them in securing employment as soon as possible.

Over the past three budgets we have shown a willingness to take difficult and in many cases painful decisions that are in the interest of the entire country. This Government will continue to manage the economy in a manner that is sensible, responsible and appropriate to ensure our return to prosperity. I am confident that the decisions we have taken, and will continue to take, will restore the public finances, stabilise our banking system, provide training opportunities to the unemployed and further improve the competitiveness of the economy. They will ultimately place Ireland firmly on the road to recovery.

Senators raised a number of specific issues, which I will follow up with them. These matters included social benefits for the self-employed, which were referred to in particular by Senators Bradford, Carty and Brady.