Brendan Ryan (Labour)

Every time the House discusses unemployment and job creation, it must reflect on the context in which it is debating these issues. As time passes, we tend to make monthly comparisons of the unemployment rate. These show only minor trends such as slight increases or decreases in the unemployment rate and do not give a true indication of the position. For this reason, I do not make any apology for reflecting on the extent of unemployment before proceeding to address other issues.

As of the end of May, there were 437,922 people on the live register, an increase of 283,912 or 184% since the end of May 2007 when the Fianna Fáil-Green Party Government was elected. In Swords in my constituency, which includes Donabate and Portrane, unemployment has increased by 245% since the general election, while Balbriggan has experienced a massive increase in unemployment of 253% in the same period. The towns in question have been hit hard and are relative unemployment blackspots. It is unacceptable that in both locations only limited signing on services are available and people must trek into Dublin city centre for routine signing.

Unfortunately, the live register figures for May make clear that we have not yet hit bottom and defy the claims by the Government that we have turned the corner. I concur with Senator John Paul Phelan in this regard. In addition to increased unemployment, tens of thousands of people have been forced to emigrate, while tens of thousands more have remained in or returned to education for the same reason.

Tackling the jobs crisis is critical to securing an economic recovery that will help close the budget deficit and reduce the need for future tax increases. The knock-on effect of endless job losses on the public finances is enormous, with every additional person on the dole costing the State approximately €20,000 a year between lost tax revenue and extra welfare payments.

What is the social impact of these developments? There are 85,620 people under the age of 25 years on the live register, an increase of 180% from 30,561 at the end of May 2007, the month in which the Government came to power. Youth unemployment is a social time bomb. If young people are condemned to a pattern of long-term unemployment in their teens and early 20s, it will be very difficult for them to emerge from the current recession unscathed. Young people without skills or qualifications are especially at risk. During the boom years, many young people left school early to enter the workforce. Unless the Government ensures significant investment in the further education and training of these young people, they face a future of long-term unemployment and are in danger of losing self-esteem. The difficulty they experience in making a successful transition from school to work will potentially place them at life-long disadvantage. A life of unemployment, with lower wages and greater unhappiness, will lead to poor health for many in later life.

While unemployment is bad for the economy, it is also bad for society as it will inevitably result in increased social costs. Crime will rise and widespread social unrest and devastation of lower income neighbourhoods can be expected. For this reason, joblessness must be given the priority it deserves. What should the Government do? It must place people before banks and private profit. Unfortunately, getting people back to work appears to be low on the list of Government priorities. The Government does not have a strategy for getting people back to work, retaining jobs or creating serious alternatives to life on the dole for the many people, particularly young people, who long to secure appropriate training.

The Government should act on the call from ICTU, IBEC and a number of other organisations for continued investment in infrastructure to return people to work. The Labour Party has, over the past year, consistently made the same call. Mr. Danny McCoy of IBEC stated yesterday:

Since 2007, more than 140,000 construction jobs have been lost, with employment in the sector dropping from 270,000 to 130,000. Government has a huge role to play in halting this process. With construction prices having fallen by 30%, now is an ideal time for Government to put in place specific investment plans representing good value for money to protect jobs and generate a return for the economy.

While I do not always agree with IBEC, the accuracy of Mr. McCoy's analysis is blindingly obvious. Domestic demand will only improve with investment. In the current climate of banking crisis, investment must be led by the Government. When we have ICTU and IBEC singing off the same hymn sheet it is significant and due notice should be taken of the hymn they are singing together. Unfortunately, not only is the Government not on the same hymn sheet, it is not even in the same church.

The ISME bank watch survey, which revealed that more than half of the companies that applied for credit in the past three months had been turned down, is extremely worrying. It is a damning reflection of the failure of the Government to deliver on promises to make banks provide badly needed credit. The banks have been denying for months that credit is not available. The ISME survey confirms, however, what first-hand reports received by all public representatives in their constituencies show, namely, that viable companies are being choked to death by the failure to secure credit. Jobs are being lost as a result and people who want to work are being condemned to a life on the dole.

Despite ploughing substantial amounts of taxpayers' money into the banks, Fianna Fáil and the Green Party have failed to honour commitments the Government made that the banks would be required to free up credit in return. This reinforces the case for the establishment of a strategic investment bank, as proposed by the Labour Party. What we need is a new, green field bank with a clear mission to support investment in SMEs and innovative firms and assist in the funding of infrastructural investment. The Labour Party has always argued that the action required to deal with the banking crisis and budget deficit must be accompanied by a strategy for jobs. Creating jobs is the key to getting Ireland moving again.

The Labour Party has proposed a series of job creation initiatives, including the establishment of a strategic investment bank which would use €2 billion - less than 10% of the total - of the National Pension Reserve Fund to support commercial investments of up to €20 billion in critical infrastructure projects, innovative start-ups and the small and medium size enterprise sector; an SME working capital guarantee scheme, which would ensure that viable small and family businesses are able to secure the loans they need; a €1.15 billion jobs fund to support training schemes and labour intensive capital investment; a PRSI holiday for employers who take the long-term unemployed off the dole; and a graduate and apprentice programme which would guarantee relevant work based training and an opportunity to obtain new qualifications for all young people out of work.

Just a few months ago, the Government voted down a Labour Party Bill which would have scrapped upward only rent reviews in the retail sector. The legislation, if enacted, would have reduced costs in the sector, saved countless businesses and safeguarded thousands of jobs but was rejected by Fianna Fáil and the Green Party. My party's policy document on tourism, Extending the Welcome, which was prepared by Deputy Mary Upton and is the subject of Private Member's time in the Dáil tonight, contains well thought out proposals to sustain and develop the tourism industry. It would result in the creation and retention of valuable jobs in the sector. In addition, Deputy Seán Sherlock is completing a policy paper on the food and agri sector.

Sector by sector, the Labour Party is addressing the crisis that has been allowed to develop by the Government. In contrast, we discovered in recent weeks that five months after it was announced in the budget, the Government has made virtually no progress on its PRSI incentive scheme for employers, which was supposed to facilitate the creation of some 12,000 new jobs and reduce the numbers on the dole queues. It is high time the Taoiseach and his ministerial colleagues gave unemployment the priority it deserves. Creating and retaining jobs is the key to getting our economy moving again. We need a much more proactive approach by the Government, one that is in line with that proposed by the Labour Party.

On third level education and education places, third level applications have risen but not enough places are available. Why does the Government believe it is better to have young people on the dole than in college? Its plan to penalise those who do not take up training that is sometimes unsuitable and fruitless is not the way to proceed.