Ivana Bacik (Independent)

I move:

That Seanad Éireann:

— notes that the Government''s four year plan published on 24 November 2010 contains nothing by way of concrete measures to restore employment;

— further notes that every job lost costs the State €20,000 a year in tax forgone and direct payments, and that the number of jobs lost since 2007 now stands at 288,000 costing the Exchequer an additional €5.8 billion per annum;

— believes that unless there is concerted action by the Government on a comprehensive jobs strategy there can be no hope for recovery in the Irish economy;

— regrets the fact that the Government is so overwhelmed by the banking crisis that it has lost sight of the key role it must play in promoting a growth-led strategy, rather than one which is focused exclusively on the necessary fiscal adjustment; and

calls on the Government to establish a strategic Investment bank to fund viable businesses around the country and invest in strategic infrastructure projects, bringing forward coherent sectoral strategies in areas such as tourism, food, cleantech and the creative industries, re-invigorating the State agencies, including the county enterprise boards, ensuring the provision of high-speed broadband, and giving greater priority to support for applied research to support the commercialisation of new knowledge.

I welcome the Minister of State to the House. We welcome the opportunity to have this debate as debate on this issue has been lacking on the Government side in recent weeks and days. All the focus currently, as it should be, is on the appalling news of the bailout we have been forced into from the IMF, the European Union and the ECB, on the cutbacks the Government will impose, and on the so-called national recovery plan - a real misnomer - the Government has published. We are in the international news for all the wrong reasons. It is clear the Government has sold us out and sold our sovereignty for the sake of propping up a few zombie banks and for the sake of honouring a guarantee that should not have been given in September 2008. It is of no pleasure to those of us who voted against the bank guarantee in 2008 to see that we were right about the appalling consequences it has had in terms of signing us up to an unconditional guarantee for the enormous and mind-boggling level of private losses we now realise the banks sustained over those years.

The words spoken by economist Paul Krugman at the weekend were clear. He said that what we had done in Ireland was to make our private losses into public obligations. The Government is responsible for that and that is the reason our sovereignty has now been sold out to international institutions. It is a sorry and sad day when we see the IMF and the European Union dictating terms to us, as they are doing no matter what the Government says. In the midst of all of this extraordinary political change and development, the Labour Party suggests there has been insufficient focus by the Government on the crucial issue of job creation. This is the real focus of our motion.

The Government's four year plan, published on 24 November, contains nothing by way of concrete measures to restore employment. It talks about a growth strategy, but there can be no growth. International institutions are pouring scorn on the Government's projections for growth. There cannot be a growth strategy unless there is a strategy to tackle unemployment and job creation. That is the reality. Nothing was said about the need for investment and a stimulus in creating jobs. We cannot divorce the jobs or unemployment crisis from the fiscal crisis. The Government previously attempted to divorce the banking crisis from the deficit crisis by pretending the two were separate, but we were driven into the arms of the international institutions by the banking crisis. Equally, the unemployment crisis has an enormous impact on the economic crisis and the deficit.

The Labour Party motion notes that every job lost costs the State €20,000 a year in tax forgone and direct payments. Since the 2007 general election 288,000 jobs have been lost at an additional cost to the Exchequer of €5.8 billion per annum. That stark economic figure masks the human and social costs each job loss represents. Each of us has friends or family members who have lost jobs since 2007 or been forced to emigrate as a direct result of the Government's economic policies. Unless the Government takes concerted action on a comprehensive jobs strategy, we cannot hope for recovery or sustainable growth in the economy. We regret that it has become so overwhelmed by the banking crisis that it has lost sight of the key role it must play in promoting a growth-led strategy. Its rhetoric is focused on fiscal adjustment and cuts to public services. The plan gives no hint of a commitment to job creation.

Last Saturday the Labour Party finance spokesperson, Deputy Burton, organised a pre-budget seminar which, like all my party's policies, focused on job creation. It included excellent presentations by economists such as Marie Sherlock and John Martin of the OECD who spoke about the need to retrain the unemployed and target particular groups such as the large numbers of young men who had left school early to work in the construction sector during the boom years. While they may have completed apprenticeships, their training was narrowly focused and, in many cases, left them with difficulties in terms of basic literacy and other skills.

These issues draw our attention to the need to restructure FÁS. It is unfortunate that the crisis in the economy took place at the same time as the immense crisis of confidence in that organisation because we desperately need a coherent public employment and retraining service which can co-ordinate apprenticeship programmes and expand the short-term course offered by FÁS in the boom years. Apprenticeship courses should be more holistic and less vocational in nature. Trainees should be given a general education which would include literacy skills in order that they would be better able to take up jobs in the sectors that remain productive.

The Opposition does not dispute the Government's claim that some areas are enjoying growth, but we need a concerted strategy to support continued growth. There is insufficient focus on developing the indigenous manufacturing and export-led sectors which have the potential to achieve sustained profitability and job creation. There is also a lack of commitment to areas which economists have identified as offering the potential to achieve further growth. They include health care, insurance and small-scale construction. For example, retrofitting could make homes more energy efficient. The big construction projects have come to an end, with the unfortunate result that a number of architecture firms have closed, but home improvement projects offer opportunities to construction related businesses. Again, however, they need support.

The Labour Party has pointed to the need to ensure adequate credit flows to the small businesses which can support job creation, even during the recession. These businesses are being starved of credit. During the debate on NAMA, the Minister for Finance promised that a credit ombudsman mechanism would be established. France has established a very successful independent ombudsman model to which small businesses can appeal if they are unreasonably refused credit by their banks. I ask the Minister of State at the Department of Enterprise, Trade and Innovation whether the Irish version has enjoyed much success, given that it appears to many of us that banks continue to refuse loans to small businesses. We need to know why the ombudsman has not been effective because this is a means by which we can support the small businesses which employ large numbers of people.

The motion calls on the Government to establish a strategic investment bank. This is a major element of the Labour Party's economic policies. Such a bank would fund viable businesses and invest in strategic infrastructural projects. Under the new national development plan which my party has promised, we would prioritise labour intensive projects such as the schools building programme which did not use the total capital allocated to it, even though this is an area in which the Government could be stimulating growth and job creation. The bank would also bring forward coherent sectoral strategies in various areas, including tourism, food, clean technology and creative industries, reinvigorate State agencies and facilitate the provision of high speed broadband services. The biotechnology and pharmaceutical industry has strong potential to achieve profitability and sustainable growth, but it needs to be targeted for job creation.

We cannot support the Government's amendment to the motion which proposes that the Seanad endorse the national recovery plan. I am amused by the suggestion made in the amendment that we must recognise the measures taken to ensure the continued operation of a sustainable banking sector. If we did not know it already, the IMF and the European Union have told us that the banking sector, as currently organised, is far from sustainable. We have long been calling for Anglo Irish Bank to be wound down and this is now going to happen. Given that the Government's economic policies have failed to the point where we have had to seek outside help, to suggest the national recovery plan is a pragmatic or achievable roadmap for sustainable growth is laughable.

Perhaps the Minister of State might clarify certain reports that have appeared in the newspapers. We have not yet seen the memorandum of understanding agreed with the IMF, the European Union and the ECB, but the national recovery plan which we have seen was designed for a different purpose. It was not designed to fulfil the requirements of the IMF and the EU. The memorandum of understanding will dictate the terms of the budget and of economic policy over the next four years because the Government is planning it, but in practice it will not be the Government that will implement it in the years to come.

There is plenty more I could say on job creation, which my colleague, Senator Prendergast, will address. The Labour Party's motion and its policy generally is to focus on job creation and on the need to stimulate growth in the economy and not to proceed in the short-sighted way the Government is doing in focusing only on cutbacks and savings rather than on stimulus measures.