Seán Sherlock (Cork East, Labour)

I thank the Senator for raising this matter. As the Senator has raised the issue of the job losses at GlaxoSmithKline, it is important for us to join with him in acknowledging the addition to the numbers unemployed in Dungarvan. I acknowledge what the Senator is saying in that regard and I join with him, although I do not want to give just platitudes, in extending our sympathy to those families. I have listened to his comments about the recommendations of the report of the Oireachtas Joint Committee on Enterprise, Trade and Employment. I must note for the record that the Senator's Oireachtas colleague Deputy Ciara Conway also contacted me today about the GlaxoSmithKline announcement. I was told that while the head count reduction is regrettable - there is no question about that - the company's aim is to remain focused on the long-term future of the site, ensuring that it remains competitive. Although the site remains strategic within the company's network, the company must continue to control its cost base and be more flexible because of global trends. That is the line coming from the company on this.

It is easy for us as Ministers to stand here and say this is down to a global phenomenon, but a foreign direct investment company is particularly subject to retrenchment in terms of its cost base, especially if it is competing against other aspects of its own structure, and it is appropriate for it to reduce its costs. The unfortunate thing about that is the resulting job losses. If it does have a programme of retrenchment, the important thing is that the company makes itself sustainable so it can preserve the remaining jobs. We must try our best to work with the State agencies in that regard.

I have noted the report referred to by the Senator, which was produced in 2008, a time when the country as a whole was facing immense challenges. We all know that job creation is central to our economic recovery and it will be clear from the programme for Government that job creation is at the core of the Government's policies. The role of my Department is to ensure we have the right policies in place to support and enlarge our enterprise base in order to facilitate job creation and job retention.

The jobs initiative announced on 10 May focuses our limited resources on measures that offer the greatest potential for expansion and employment creation. The initiative represents a positive intervention to support those entrepreneurs and business people who will create jobs and rebuild our economy. The key elements were the 12.5% corporation tax and its retention and the introduction of a new, temporary, second reduced rate of VAT to apply primarily to restaurants and catering services, hotel and holiday accommodation and various entertainment services. I hope these reductions were adhered to in Waterford especially in recent weeks with the visit of the tall ships and I hope that the hospitality sector there has done well out of it. Our hope is that this will continue. Other elements include the halving of the lower rate of employers PRSI on earnings of up to €356 per week; the focus of the State's capital expenditure towards more employment-intensive projects in the areas of education, local and regional roads and sustainable transport projects; and the provision of an extra 20,900 activation places for the unemployed. The jobs initiative is an important first step in this regard.

One announcement for the south-east region this year will create 50 new jobs in Waterford. Also, jobs announced for the region in recent years continue to come on-stream. As well as marketing the region for new green-field investment, IDA Ireland continues to work with existing clients to broaden their mandate in Ireland and also with existing clients to re-invest in sites in the region. While we are operating in difficult economic times, there are still investment opportunities in global markets. There are 31 IDA Ireland-supported companies in Waterford city and county employing approximately 5,300 people. Clear evidence of a transition towards more knowledge-based and higher value activity is apparent in the resilience of companies such as Bausch & Lomb, Honeywell, Citi Hedge Funds, Genzyme and Sun Life Financial.

I will be visiting Waterford Institute of Technology, WIT, because I have heard about the great work under way there in the life sciences, information and communications technology, international services and high technology engineering areas. WIT is one place earmarked for a visit by me as the Minister of State with responsibility for research and innovation. It is important to spin out as many companies as we can, locally if possible, from such institutes as WIT.