Seanad debates
Wednesday, 2 November 2005
Quarterly National Household Survey: Statements.
3:00 pm
Michael Ahern (Cork East, Fianna Fail)
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I apologise for being late. I mixed up the times.
I welcome this opportunity to address the House on the quarterly national household survey results. It is important sometimes to reflect on our achievements and to pause for a moment to understand what is happening in our economy. The figures published by the CSO last month tell a compelling story of transformation in our economy.
The figures from the latest quarterly survey are marked proof of the effectiveness of Government policies in the areas of employment and the labour market. Our recent economic success has been remarkable. The so-called "jobless growth" of the early 1990s has long since been replaced by consistent employment creation.
Employment increased by 93,000 in the 12 months to August 2005 bringing the total at work to 1,929,200. This is the highest annual growth rate in five years and is an increase of 31% or 461,500 since 1997. Women have particularly benefited from the very significant growth in employment during this period. The number of females in the workforce has increased by 39% since 1997, while the number of male workers has increased by 26%.
The figures also show a strong regional performance with employment in the Border, midlands and western regions increasing by almost 6%, giving employment to an additional 26,000 people. Moreover, we have seen employment increase in most sectors of the economy with financial and business services showing strong growth. This strong employment growth has been based on a strong and vibrant economy. With favourable economic growth forecast to continue, the indications are that employment growth will be maintained in 2005 and 2006. Employment is forecast to grow by approximately 2.9% in 2005 and by 2% in 2006.
Unemployment continues to be maintained at a low level of 4.2% and is forecast to remain close to this level into next year. Our unemployment rate is currently less than half the EU average of 8.6%. Our current rate compares with an unemployment rate of 10.4% in 1997. The numbers unemployed have decreased by 50% in this period, from 171,200 to 85,600. Long-term unemployment has dropped from 90,000 to 27,000, a decrease of almost 70%. It now stands at 1.4%, which is approximately one third of the EU average.
The consensus approach, under social partnership, of involving employers, employees and the Government has been a major contributor to Ireland's economic success. This has been backed up by a well-balanced suite of employment rights legislation, which together with measures designed to stimulate employment, provide an appropriate framework for the purpose of achieving an efficient and competitive business environment.
In addition to employment growth, the partnership agreements have also been effective in securing improved economic performance and raising living standards. In the ten years to 1987 inflation was running at an average of 12%, while the current rate is just 3%. The pay terms of the two most recent national agreements have given workers pay increases of almost 30%.
The Government will continue to implement policies that lead to higher levels of employment. We will strive to reach and, if possible, exceed, the EU employment rate targets for 2010 of 70% for overall employment, 60% for female employment and 50% for employment of older workers.
As pointed out by the enterprise strategy group, the policies adopted to date have proved very successful but if we are to move forward in the context of a knowledge-based, innovation-driven economy a new set of challenges awaits us which require a different approach. In the labour market context this means that we need to maintain a strong focus on education and training, including lifelong learning, to ensure the development of a highly skilled, adaptable workforce. We must ensure an adequate supply of labour to meet the needs of the economy and to sustain economic growth. Labour will be supplied through a number of sources, namely, the underlying population increase, increased participation by the unemployed and those outside the labour force, and migration.
Education and training have been central to our economic success. Our future prosperity will depend on workers acquiring the knowledge, skills and competencies required to compete in an increasingly global economy. The enterprise strategy group's recommendations made it clear that lifelong learning will be key, as the nature of the workplace requires that workers be ever more flexible and adaptable. More than in the past, people will need to upskill and reskill throughout their working lives. This can only be achieved by introducing new approaches and by putting in place the necessary delivery structures. The One Step Up initiative, which I announced recently and have substantially resourced, is an important element in this process. This initiative will promote lifelong learning, in-company training and upskilling of our workforce by providing easy access to a range of training and learning initiatives, including tutor-led training and e-Iearning. It will also assist employees to obtain a recognised qualification within the national framework of qualifications.
Attention must be devoted to ensuring an adequate supply of labour. To increase the numbers at work in the context of the decreasing numbers of young people coming into the labour market, we will need to mobilise labour supply from other sources. This will mean encouraging increased participation in the domestic labour market. It will also mean adjusting economic migration policy in Ireland to address identified labour shortages and skills needs.
Migration, combined with the natural increase in the population, has resulted in an increase in the population by 87,000 to over 4 million in April 2005, the highest it has been in almost 150 years. This is an historic milestone. It is a very positive trend for Ireland in view of our labour and skills shortages. The high level of immigration in the past year, with over one third coming from the ten new member states, is a result of our non-restrictive policy to those who wish to work in Ireland from these countries. There is no doubt that for most of our skills shortages, appropriate EEA workers are available.
The total population today is the highest since the census of 1861. The historic nature of this population increase should not be lost sight of. The CSO estimates that in the next 15 years, our population may reach 5 million. The Employment Permits Bill 2005, which was introduced in the Dáil last month, includes provision for a more managed economic migration policy, including a continual assessment of skill and labour needs. Research carried out by the expert group on future skills needs will continue to inform Government policy in this area. The focus of this policy will be to facilitate efficiently and effectively the entry into Ireland of people with skills that we need, but which we cannot source from either within Ireland or the EEA.
The high growth in employment indicates how well the economy is doing and how important it is that we can absorb increases in the labour force both from the domestic front and from abroad. The strong employment growth suggests we have put in place the right enterprise policies to build a strong economy. Through lower taxes, we have given individuals more choice over how to spend their incomes and we have nurtured a culture of enterprise where people with new ideas can see those ideas turn into value. We are seeing the growth of an enterprise culture everywhere from software to sandwiches, which shows that innovation is not just the domain of research scientists.
In a decade, our approach to risk-takers has changed and no longer are entrepreneurs left with the option of having to emigrate to innovate. Ireland has been transformed from a country where many young people had to leave to find jobs to one where young people from across the world are now contributing to our economy. We have implemented broad economic polices that have changed the business environment. This is not just our own analysis. After eight consistent years of managed growth and prosperity, the International Monetary Fund is still able to commend Ireland's continued impressive economic performance, the result of sound economic policies.
In the space of fewer than 15 years, we have built a very different economy, one that has the inherent capacity to sustain growth rates that are the envy of some and a sought-after example for others. At the root of this exceptional employment performance is a deeply-embedded commitment to pursue policies across Government that boost our competitiveness. This is underpinned by recognising that we must constantly change, adapt and reform if we are to stay ahead. I am realistic enough to know that keeping, let alone expanding, our share of world trade and investment will not be easy. Our competitors are no more than a mouse click away.
Competitiveness is as easily lost as it has been hard won. While we are no longer a low cost economy, the recent annual report from the National Competitiveness Council recognises we retain some fairly impressive and significant national strengths. For example, we have achieved remarkable rates of economic growth over the past decade and we have recorded one of the best economic performances in the world. From 1997 to 2004, Irish GDP grew by an average of more than 7.5%, compared with an average of just over 2% in the EU I5. Under the sustainable growth heading, Ireland's living standards as measured by GDP per capita,the NCC calculates we come first out of 15 countries and for GNP per capita we are sixth out of 16 economies it looked at. GNP per capita has almost doubled since 1997.
However, it is not all about arcane economic numbers. Real progress has been achieved in improving living standards and this is reflected in Ireland's strong performance in the UN's Human Development Index, which is a good indicator of general quality of life. Here we came fifth out of 15 comparable countries. In addition to the decline in unemployment and long term unemployment, the ESRI has shown that, over the period 1994-2001, life chances improved significantly. This is a trend directly related to declining unemployment and reduced levels of dependence on social welfare in a period of economic boom.
Maintaining our competitiveness is of great importance for Ireland because we are one of the most open economies in the world. In terms of trade performance, we come second out of 16 nations in the NCC's league table, with much of this driven by our strengths in the foreign investment sector. We have one of the most favourable taxation regimes in Europe and have put in place enterprise policies that support investors. This makes Ireland a secure and profitable location from which to do business globally. The combined effect of these policy strands has ensured that Ireland has consistently been an attractive location for foreign direct investment for a considerable period and we have successfully won more global and EU foreign direct investment than our size would naturally suggest.
Our commitment to developing a modem high technology and competitive economy is winning where it counts — in the marketplace. The export performance of the high technology sector is powered by the skill and ingenuity of a productive and competitive workforce. Chemical, pharmaceutical, medical devices, electronic and e-commerce sectors would not consistently choose Ireland as an investment location if we did not provide solid competitive advantages. We all know that global competition for prestige and high value mobile investment is intense, yet global businesses continuously choose to invest here because we are competitive for these high end industries.
Not only is foreign direct investment crucial to maintaining economic vitality, how we manage the transition to a different portfolio of foreign investors is a key challenge that we are meeting. Manufacturing is still the engine driving our economy and represents by far the greater part of the exports of €68 billion and local economy expenditure of €15 billion by overseas companies in Ireland each year. The type of manufacturing investment being secured for Ireland has changed. Many Western-type economies are seeing a gradual loss of low level, labour intensive operations to lower cost countries. However, innovative economies, like Ireland, continue to attract advanced manufacturing operations that are at the cutting-edge of technology, where high productivity output is heavily reliant on the skills and capability of a highly educated and agile workforce. These investments may not have the headline grabbing head count of previous years, but their massive capital investment per employee shows that we are serious contenders when it comes to winning sophisticated, technology-driven, mobile investment.
We will continue to encourage manufacturing. It provides the test bed for innovation and ingenuity. Developing new products, creating new processes and achieving greater productivity is an integral part of manufacturing today.
Helping us further along the road of transformation, the enterprise strategy group's analysis of our enterprise performance made a very strong case. It showed us how and where we need to be creative in policy thought and deed. I referred earlier to the One Step Up initiative and the upskilling of the workforce and population. This is one part of our response to the enterprise strategy group.
A second key plank in our response to the O'Driscoll report has been the new Enterprise Ireland strategy to help transform Irish indigenous enterprise. The vision set out in the strategy is the support and creation of a dynamic indigenous firms sector engaged in high value added activities. Enterprise Ireland's clients will become more intensely market focused and innovative, providing new and proprietary products at premium prices. The strategy has a heavy emphasis on research and innovation, exports, competitiveness and entrepreneurship to deliver greater numbers of new high growth companies with strong potential to win increasingly profitable contracts in global markets. It aims to help Irish companies grow into self-sustaining enterprises of sufficient scale to compete internationally.
Driving the competitiveness agenda and keeping us ahead of the curve was very much at the heart of the ESG's recommendations. We have a broad and diversified enterprise base that has expanded with the help of constructive economic and business policies and we have one of the best possible international locations from which to do business. As I want to keep it this way, I am determined we maintain this competitive advantage.
I wish to recall the important contribution the European Union has made to the economic and social transformation in this country. Our membership of the Union has been an important catalyst for the broadening of our export markets and has created common rules which benefit citizens and business. Moreover, the Union has brought significant benefits, not just to the performance of our economy, but also the welfare of citizens. I only need to mention decent working hours, safer food, portable pensions, cheaper flights and cleaner beaches to give some idea of the benefits Europe has brought to citizens.
There has been much comment on the sluggish performance of the EU as a whole. Growth in 2005 is expected to be somewhat over 1%. While some of the larger member states are undoubtedly underperforming, we should not lose sight of the spectacular successes. The recently published world competitiveness rankings show that 13 of the EU member states, including Ireland, are in the top 30 and the three Scandinavian member states of Finland, Sweden and Denmark are in the top five. The UN Human Development Index, published earlier this year, ranks 12 EU member states, including Ireland, in the top 20 in terms of quality of life. Clearly, the EU is doing something right.
We can be justly proud of the achievements of the past decade. There is no greater indicator of success than being a sought after location in which to work and live. The total migration flow to Ireland in the 12 months to April 2005 is estimated at 70,000, the highest figure on record since migration estimates began in 1987. As a corollary, emigration is at it lowest since then.
The challenge is one of preparing now for the prosperity of next generation and to manage the transformation of our economy through that process. This demands hard choices as we must at the same time seek to further improve the life chances for all our citizens, not just those in employment. From my perspective, a successful society needs a dynamic economy, which constantly responds to the evolving demands of international competitiveness. We have proved that we can meet this challenge.
Paul Coghlan (Fine Gael)
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I welcome the Minister of State to the House and I thank him for his speech, even if I cannot fully accept his analysis. There is no doubt that these are exciting times for Ireland. The CSO reports that the population of this little country has breached the 4 million mark, standing at 4.13 million people. Following the Famine and the relentless flight of young people from our shores in the proceeding century and a half, we can finally look to inward migration as a sign that the hard and painful economic reforms put in place by successive Governments have worked. We are richer, more confident, outward looking and self assured, yet there remain a series of key challenges to which we are simply not facing up. Unless we start identifying problems, coming up with solutions and implementing those solutions, we await a world of pain in the coming years.
According to the Forfás expert group on future skills needs, the list of professions facing a skills shortage is staggeringly long. It includes bricklayers, plasterers, carpenters, floorers, painters and decorators, accountants, actuaries, financial analysts, investment and risk analysts, fund managers, engineers, welders, computer analysts, chemical engineers, doctors, dentists, dieticians, radiographers, nurses, social workers, HGV drivers, sales staff, chefs, credit controllers, security guards, waiters and waitresses, warehousemen and women and care assistants. As the economy grows, so too will the need for these jobs. It is a worrying prospect that if we are having difficulties at this stage, we are facing much greater difficulties into the future.
The Employment Permits Bill 2005, while welcome, does not go far enough to alleviate these shortages. The Minister has failed to explain adequately why he has decided to retain the current system of granting permits to employers rather than employees. He has also failed to explain why he has not bothered even to refer to the issues of family re-unification and of the employee holding his or her own permit. There are 137,000 migrant workers in Ireland representing 7% of the labour force. Over the period 2000-05, over 100,000 persons from outside the EEA came to Ireland for employment purposes. This is in addition to the substantial numbers of EEA nationals, with estimates of over 90,000 having applied for PPS numbers since 1 May 2004. We do not have the legislative infrastructure to maintain that situation and the new Bill, unless it is amended along the lines we have proposed, will not solve the problem.
The Immigrant Council of Ireland has pointed out that we have developed and are perpetuating a two-tier system of migrant workers. On the one hand, we have those on work visas who are generally in better jobs with their families by their side, who are better paid and valued by the State. On the other hand, there are individuals with no families, who are lower paid and not here in their own right, but rather in the gift of their employers. This is ridiculous. The Minister talks about a green card system, but it is nothing of the sort. A green card system gives the individual the right to search for work, apply for residency and aspire to citizenship. The Minister has shown scant regard for any of those things. I remind the Minister that Forfás states baldly: "While the EU and EEA counties will provide a substantial proportion of Ireland's low-skill requirements, continued non-EEA immigration will be needed to meet some of Ireland's high skill demands over the next number of years".
We have a duty to protect those who are keeping this country going, yet we witness the Polish edition of Newsweek reporting that Ireland was a "living hell" for many Poles, who arrived expecting to be able to pick and choose jobs and instead found themselves sleeping rough and living on charity. The Polish Embassy has suggested that around 10,000 Poles living in this country are experiencing difficulty. In my own town of Killarney, the local population, council and the churches have extended a warm welcome to the Poles and have organised some social integration. There is a Polish mass once a month in St. Mary's Cathedral and a social interchange among the Polish community in Killarney, which is very welcome. Nevertheless, there have been shocking reports of exploitation in Gama, Irish Ferries and elsewhere while the Government reacts to events rather than shaping them, typified by its announcement of an extra few staff members for the labour inspectorate after the event.
Ireland is new to inward migration. We have the almost unique opportunity to avoid the pitfalls of the US and the UK, where an enormous underclass of immigrants and their children has developed. In these countries, an entire generation of children has grown up knowing nothing but social deprivation and poverty. The link is made to the fact that they are of foreign parents, and their situation is often linked to the colour of their skin or their religion. As a result, an almost ingrained distrust of the institutions of state, including the police, becomes the norm. As with all communities suffering poverty, crime can become rife. The misconception that immigrant communities are inherently more crime ridden than the native born population begins to find favour. All of this will happen here if we do not, at this early stage, wage war on any trend towards the ghettoisation of immigrant communities, be it in the geographical or economic sense.
We must ensure that we manage immigration as part of a comprehensive policy and view it as a social phenomenon and not merely an economic one. The Government needs to develop a policy to stamp out racism, promote multiculturalism in schools, consider hate crime legislation, examine the extension of citizenship, eliminate abuse of the system and prepare us for the huge increase in population that we inevitably face in the years to come. It is crucially important that people who come to our shores to gain employment must be integrated as part of society, to head off the race problems that occur in other jurisdictions. This will not happen by accident and the education system will have to play a role in ensuring people are tolerant of migrants.
Figures in the quarterly national household survey paint a rosy picture overall, but there are some worrying trends. The number of people classified as unemployed has risen, while those employed in both agriculture and manufacturing continues to decline. An action plan for both these sectors of the economy is vital. As an economy or a society, we cannot exist within the service sector. We must do what we can to maintain a manufacturing base because it is the key to spin-off development of ancillary services and industries. We must not allow the flight from the land to continue unabated. We must find roles for people in agriculture or on the land to play in the development of rural communities. We cannot leave the people employed in those sectors to the vagaries of globalisation.
The competitiveness agenda has been allowed to slip. We were fourth in the OECD world competitiveness forum ranking in 2000. We are now 26th which is evidence we have slipped. It has been recognised in numerous studies that there is a competition deficit in this country. Across key sectors of the economy, including many directly controlled by the State, there is an absence of a competitive dynamic which would provide consumers of services with a sufficiently wide choice.
Approximately half the workforce is not in a pension scheme and I am sure the Minister of State would agree this is a serious challenge. Figures from the Irish Association of Pension Funds show the average contribution to pension schemes is 10%. However, to maintain an adequate income on retirement, the figures should be between 15% and 25%. The Government is discussing this issue and I expect it will have a statement to make on it in the context of the forthcoming budget. This is an issue for which we must definitely plan ahead.
Yesterday I read that Mr. Robbie Kelleher, the chief economist at Davy Stockbrokers, pointed out that the Minister for Finance will have a €2 billion net giveaway in his December budget, and I have no doubt he is correct given his authority on the subject. That allows plenty of room for manoeuvre. Given that half the workforce is not in a pension scheme and so many who are pay in so little, there is much to make up in that regard. The Leader is on record as favouring a splurge when the special savings incentive scheme accounts mature. That will not do the economy much good, or perhaps it will. Views are divided on that issue. It is important incentives are provided in respect of pensions because we are all lecturing each other about the shortage of pensions. This is a great opportunity for the Minister for Finance to do something good and concrete about it, which I would encourage.
Terry Leyden (Fianna Fail)
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I welcome the Minister of State, Deputy Michael Ahern, and wish him continued success in his Ministry. I also welcome the opportunity to contribute to the debate on the quarterly national household survey. These figures are marked proof of the effectiveness of Government policies in the areas employment and the labour market.
Our recent economic success has been remarkable. In the second quarter of 2005, there were over 2 million persons in the labour force which represents an annual increase of 94,500, or 4.9%. This is the highest year-on-year increase recorded in absolute terms since the quarterly national household survey commenced, surpassing the record annual increases attained at the end of the last decade.
Over this past ten years, since Fianna Fáil and the Progressive Democrats have been in Government, the labour force has grown by 556,000 people, or over 38%. The number of females in the workforce has increased by over 300,000, or almost 55%, while the number of males has increased by 254,000 or 28%. For every five people entering the workforce, three are female. This is a remarkable opportunity which has been created by the Fianna Fáil-Progressive Democrats Government. There are 165,000 companies operating in Ireland compared with 147,000 ten years ago. Indeed, the Minister of State has contributed greatly to that in his work as Minister of State with responsibility for trade. Trade is vital to the development of these companies. The major growth in our economy over recent years has been accompanied by a rise in corporate profits due to increased exports and import markets. The fact that corporation tax is at a particular level has been a major benefit to this country.
Unemployment is at an all time low and the total number of income tax payers has risen substantially since the early 1980s. Apparently, we face a period when we may not be able to recruit enough workers to staff the expansion in our economy, which is good thing. The Employment Permits Bill 2005, introduced in the Dáil last week, includes provision for a more managed economic migration policy, including continual assessment of skill and labour needs going forward. The focus of this policy will be to effectively and efficiently facilitate the entry into Ireland of people with skills which are needed but which we cannot source from within Ireland or the EEA. This is a very progressive policy brought forward by the Minister of State and his colleague, the Minister, Deputy Martin.
The high growth in employment indicates how well the economy is doing and how important it is that we can absorb increases in the labour force both from the domestic front and from abroad. This would have been an unthinkable prospect in the 1980s when all one seemed to hear were news reports from around the country of more business closures and towns losing their big employers. The figures from the latest report are marked proof of the effectiveness of Government policies in the areas of employment and the labour market. Our recent economic success has been remarkable.
Sustaining economic growth is crucial to our capacity to tackle poverty. It provides both jobs and resources which are required if poverty is to be tackled in the years ahead. To maintain economic and employment growth policy makers must ensure Ireland's competitiveness in a global economy and continue public and private investment in public infrastructure and productive activities. That is why I particularly welcome the launch yesterday of Transport 21. It is a brilliant plan for the 21st century and I compliment the Government on this €34.4 billion transport initiative.
James Bannon (Fine Gael)
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Is the Senator aware Roscommon was let down yesterday?
Terry Leyden (Fianna Fail)
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This is a mid-term review of Government in action. It is a manifesto of success and is an encouragement to those working with the Government. Ministers, Ministers of State, Deputies, Senators, councillors throughout the country involved in local government and others share in this success story. The public servants working with and advising the Government should all take a bow.
4:00 pm
Terry Leyden (Fianna Fail)
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This survey should be circulated to every household in the country. Fianna Fáil and the Progressive Democrats are not wasters, as alleged by the Labour Party. It has been exposed by its non-appearance in the House for this debate. It is not prepared to debate this issue. I hope the Labour Party Senators are listening on their monitors and that they might attend because I am sure the Minister of State would like to hear the views of the Labour Party on this issue.
Ireland has performed remarkably well by comparison with other countries in terms of increased employment levels and living standards. More broadly, continuing improvements in life expectancy and income per capita also supports Ireland's strong performance in the UN's human development index, which is a good indicator of the general quality of life. Ireland's strong economic growth rates over the past decades are likely to reflect a number of national strengths.
The transport plan announced yesterday is a considerable proposal and is extremely worthwhile from the point of view of the west as well as everywhere else. The proposed opening up of the western rail corridor is an enormous achievement which has been brought about by constant lobbying. The Leas-Chathaoirleach would have been supportive of this move. I put on record my congratulations to all concerned, particularly Fr. Michael McGreal SJ who continues the work of Monsignor James Horan in the west. This news shows the quality of his work. He is a member of a religious order and this is a boost to his profession given events last week.
Fr. McGreal, who is chairman of the western inter-county rail committee, believes involvement in this area is very important to the development of the west and has welcomed the investment and the decision to open up the western rail corridor. The Minister of State, Deputy Killeen, who has joined us, had an input in this regard and will welcome this development, which is a major boost.
Major investment in the Atlantic road link was announced and it will materialise. It will be a boost to the west. I am sure anyone who reads these proposals will be satisfied with them. They will be implemented by a Fianna Fáil-led Government, which is a vital ingredient. Only Governments led by Fianna Fáil have succeeded in securing proper investment.
James Bannon (Fine Gael)
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The Senator will be appointed a Minister in the next Government.
Terry Leyden (Fianna Fail)
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Even when the Labour Party was part of a Fianna Fáil-led Government, progress was made through the abolition of third level fees and the launch of Teilifís na Gaeilge. Those policies were implemented by a Fianna Fáil-led Government.
Terry Leyden (Fianna Fail)
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We abolished section 31, which was introduced by a previous coalition Government.
Terry Leyden (Fianna Fail)
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We should take a bow in this regard.
James Bannon (Fine Gael)
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The Senator is bowing all his life and getting nowhere.
Terry Leyden (Fianna Fail)
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That is why we are delighted with these surveys, which are worthwhile.
Prior to the budget, we have an opportunity to assist the less well-off in our society. A total of 285,000 people are in receipt of the fuel allowance but costs have spiralled. The price of 1,000 litres of oil is €660 while a bag of coal costs €6.50 and a bale of briquettes costs €2.85.
James Bannon (Fine Gael)
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The Government parties have not increased the fuel allowance for five years. The Senator should be ashamed of himself to be part of a Government that has not delivered for our elderly.
Terry Leyden (Fianna Fail)
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The allowance amounts to approximately €9 per week. Revenue is accrued from oil and petrol sales and this should be redistributed, not to us but to those who need it most. This would be quickest way to give support to those who need it most. This will be a winter of great difficulty for people unless support is given to those who need the fuel allowance. I call on the Minister for Finance and the Government to support this scheme.
James Bannon (Fine Gael)
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The Senator is in Government one minute and the next he is looking in.
Terry Leyden (Fianna Fail)
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The only financial support available to those on low incomes to meet the cost of fuel and heating their homes is the fuel allowance. This payment by the Department of Social and Family Affairs is available to long-term social welfare recipients and is paid on a weekly basis. The onset of winter and ever increasing fuel costs will inflict hardship on the less well off in society. I seek an immediate and substantial increase in the fuel allowance. Fuel poverty is the result of poor energy efficiency of homes, low household incomes and high fuel prices. All those factors should be addressed to eliminate fuel poverty permanently.
I welcome our great success story but the Government has an opportunity in the budget to tweak and improve services. The Government parties introduced the largest increase ever in the old age pension, child benefit and one-parent family allowance. That was achieved through a caring, socialistic approach on the part of a Fianna Fáil Administration.
James Bannon (Fine Gael)
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Where are the Progressive Democrats in all this?
Terry Leyden (Fianna Fail)
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We have been the most caring of Administrations and we will continue to demonstrate that in the forthcoming budget. The Minister for Finance will give an outstanding performance again before the Dáil and the country. I hope the budget will be geared towards those most in need, the elderly and people with disabilities.
James Bannon (Fine Gael)
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I welcome the Minister of State to the House. The quarterly national household survey meets the requirements of EC Council Regulation 577/98, adopted in March 1998, which necessitates the introduction of quarterly labour force surveys in EU member states. The current survey, allied with the annual population and migrations estimates, paints a picture of a country with an expanding population of almost 4.13 million people, which is finally looking to inward migration, in place of the well documented horrors of our history of emigration.
Taken regionally, employment grew by 26,600, an increase of 5.7%, in the BMW region and by 66,400, an increase of 4.9%, in the southern and eastern regions in the year to the second quarter of 2005. The bulk of the annual increase in unemployment occurred in the southern and eastern regions with 1,600 extra signing on while a slight fall of 200 was experienced in the BMW region. This is despite the lack of infrastructure, which is crippling that region. No solace in this regard was provided in yesterday's Transport 21 report. Members of the Government parties stated a dual carriageway would be built between Mullingar and Longford within five to six years but there was no sign of it in yesterday's report nor did it refer to the upgrading of the midlands north-south route, the N55. It has been left in abeyance even though it was supposed to be upgraded when Athlone was granted gateway status and Longford hub status in the national spatial strategy. Politicians in the north midlands stated at the time this route would be upgraded but no provision was made yesterday. Similarly, no mention was made of the upgrade of the N63 between Longford and Roscommon, which contains several serious bottlenecks. The Government has no plan to improve the road structure. What has happened regarding a midlands regional airport? I have called for this on a number of occasions in the House and other fora at which I represented the people of the midlands. The Government has again neglected the midlands in this regard.
For the first time, the quarterly national household survey for March to May 2005, highlighted that the number of women in the workforce exceeds the number of women not in employment. The majority of women are in the CSO classification of employed or available for work at 51.4% compared with 35.7% ten years ago. There are many reasons for this change, with the main cause probably being the cost of a family home with the ensuing mortgage costs being taken on by couples to get a foot on the property ladder. However, this change is also driven by highly-qualified women who want to pursue careers outside the home.
I refer again to the urgency for effective child care policies to be implemented. The profile of child care needs has changed beyond recognition and Government response can no longer be put on the long finger as the response to last week's debate shows, even from within the Government's ranks. Throughout Ireland, the traditional working week is close to extinction, with almost half of our workforce working on Sundays and holidays. According to the most recent Central Statistics Office survey, almost 42% of our workforce is scheduled to work on Sundays and bank holidays, of whom, the highest number, 268,000, work in the retail and wholesale trades, including 84,000 in Dublin alone. Health sector workers comprise the second largest group at 186,000 nationally, followed by 116,000 workers in the transport and communications sector, 112,000 in the hotel and tourism trade and 115,000 workers in other service industries.
The extraordinary popularity of Sunday shopping, which makes it one of the busiest days of the week for many retailers, has forced many workers to forego their traditional day off. Other businesses, which were closed on Sundays, such as hairdressers and driving schools have been forced to follow the trend. In the UK, banks open on "bank holidays" but, to date, there is no sign of Irish banks following suit. Consumers are forcing the pace, with a 24/7 working week being their expectation, but pay and conditions for workers do not match the anti-social working requirements. When Sunday trading was first introduced in this country, workers were offered up to three times their regular pay to work such anti-social hours. In many cases this has been reduced to time and a half or even regular pay. Many workers have approached politicians to discuss this trend. The matter has gone from bad to worse and is not helping the overall situation.
Over the past 18 months the economy has been influenced by a flow of immigration, which is difficult to assess in terms of our national output. In the period from March to May 2004, 27,000 people living here had been usually resident in eastern Europe 12 months earlier and just under half of these were from Poland. The quarterly national household survey for 2001-02, showed that 36% of people entering Ireland worked in managerial jobs and 50% of them had a third level education, compared with one third of the Irish population. Some 10% worked in clerical positions, 10% in craft occupations, 24% in the services sector and 20% in semi-skilled or unskilled jobs.
As my colleague, Senator Coghlan, pointed out, things are not all rosy for Polish workers coming to this country expecting to pick and choose jobs but instead finding themselves without a roof over their heads and living on charity. Some 10,000 Poles living in this country are experiencing difficulties. The reports of exploitation, including by Gama, Irish Ferries and others are shocking. At this early stage of immigration to this country, it is important the Government puts together, sooner rather than later, a comprehensive policy to deal with all aspects of the lives of immigrant workers to facilitate integration and pre-empt the possible pitfalls of non-intervention in terms of anti-racism, extension of citizenship, and multiculturalism in education. I am pleased a food store that will accommodate the needs of Polish workers has opened in Longford.
Figures in the quarterly report paint a rosy picture overall but there are some worrying trends. The number of people classified as unemployed has risen, while those employed in both agriculture and manufacturing continues to decline. Fine Gael calls on the Government and the Minister to adopt an action plan for both these sectors of the economy. We must no longer permit the flight from the land to continue unabated. Rather than driving them off the land we must find roles for the agricultural workers to play in the development of rural communities. An example would be the extension of the REP schemes. Realistically, the farmers of this country are the only ones who can be said to be working a 24 hour day.
Another issue of grave concern is the fact that half our workforce does not contribute to a pension scheme. Figures from the Irish Association of Pension Funds show the average contribution to pension schemes is 10%. However, to generate the adequate income in retirement, the figure should be more like 15% to 25%. I am aware that the Government is discussing this at present and I hope the fruit of these discussions will be reflected in the forthcoming budget.
John Gerard Hanafin (Fianna Fail)
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I welcome the Minister of State, Deputy Killeen, to the House. The quarterly national household survey brings more good news. We should never be embarrassed by good news from The Economist, which described Ireland as the best place to live. The quarterly national household survey shows how well the economy is going. It is backed up by the National Competitiveness Council and by further indices outside Ireland.
Such is our remarkable progress, our biggest worry is that some commentators may expect our economy to levitate. We have achieved remarkable rates of economic growth over the last decade and recorded one of the best economic performances in the world. From 1997 to 2004, Irish GDP grew by an average of over 7.5%, compared with an average of just over 2% in the EU 15. The National Competitiveness Council calculates that under the sustainable growth heading, Ireland's living standards as measured by GDP per capita means we come first out of 15 countries while for GNP per capita we are sixth out of 16 economies examined. GNP per capita has almost doubled since 1997 but it is not solely a matter of arcane economic numbers.
Real progress has been achieved in improving living standards and this is reflected in Ireland's strong performance in the UN's Human Development Index, a good indicator of general quality of life. Here we came fifth out of 15 comparable countries. In addition to the decline in unemployment and long-term unemployment, the ESRI has shown that over the period 1994-2001 life chances have improved significantly. This is a trend directly related to declining unemployment and reduced levels of dependence on social welfare in a period of economic boom.
This Government has contributed greatly to economic growth and the benefits that have accrued. More importantly, it has contributed to the quality of life and will continue to do so. I look forward to the next budget and welcome yesterday's transport plan, which sees Ireland into the 21st century. We will have integrated systems, a metro, extra capacity on the Luas and more national roads and rail. This will meet needs in a positive way. The new rail stock is a credit and will be efficiently run. Fianna Fáil has a vision for the economy, the country and the people.
What does an increase of 400,000 in jobs since 1997 signify? It means we have put in place the right enterprise policies to build a strong economy. Through lower taxes, individuals are given more choice over how to spend their incomes. A culture of enterprise has been nurtured where people with new ideas are not stymied at every turn. In a decade, our approach to risk takers has changed and entrepreneurs are no longer left with the option of having to emigrate to innovate. Ireland has been transformed from a country where many young people had to leave to find jobs to one where young people from across the globe are now contributing to our economy.
In an age when we see resentment bubbling against migrant workers, we must ensure people know the value migrant workers bring to this country. We must ensure they are cared for. It is the Government's policy that every worker receives céad míle fáilte.
The Government has implemented broad economic polices that have changed the business environment. This is not just our own analysis. After eight consistent years of managed growth and prosperity the International Monetary Fund is still able to commend what it refers to as Ireland's "continued impressive economic performance, the result of sound economic policies". The employment figures published last month by the CSO tell a story of transformation. The figures from the latest quarterly national household survey are marked proof of the effectiveness of Government policies in the areas of employment and the labour market.
Our recent economic success has been remarkable. The jobless growth of the early 1990s has long since been replaced by consistent employment creation. Employment increased by 93,000 in the 12 months to August 2005, bringing the total at work to 1,929,200. This is the highest annual growth rate in five years and is an increase of 31%, some 461,500, since 1997.
Women have particularly benefited from the very singificant growth in employment during this period. The number of females in the workforce has increased by 39% since 1997 as against the 26% increase in male workers. More needs to be done if we are to continue to attract women into the workforce. The upcoming budget will include child care measures that will play an important role. Yesterday's transport initiative will provide better services and make it easier for people to commute within a reasonable time.
The strong employment growth has been based on a strong and vibrant economy. With favourable economic growth forecast to continue, the indications are that employment growth will be maintained in 2005 and 2006. Employment is forecast to grow by around 2.9% in 2005 and by 2% in 2006.
The biggest threat to our economy in 2006 is that it will overheat. There was a time the Irish Central Bank had control over interest rates but that no longer applies and there are benefits to the euro. We cannot slow down the economy and the Government is aware of the threat of constriction in the market, brought about by too few workers and too many jobs. Unemployment continues at a very low level of 4.2% and is forecast to remain at around that level into next year. Our unemployment rate is currently less than half the EU average of 8.6%, compared with a rate of 10.4% in 1997. The numbers of unemployed have decreased by 50% in this period, from 171,000 to 85,000. Long-term unemployment has dropped from 90,000 to 27,000 — a decrease of almost 70%. It now stands at 1.4% which is about one third of the EU average.
The benefits to the economy outlined in the quarterly national household survey are clear. The Government is proud of its achievement and will continue its good work in that regard.
Paddy Burke (Fine Gael)
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I welcome the Minister of State, Deputy Killeen, to the House. I am glad of the opportunity to speak on this important issue. There is no doubt that the country is doing phenomenally well and great credit for that is due to many people. Having listened to the speech by the Minister of State, Deputy Michael Ahern, earlier, and other speeches by Government Senators, one would think that the world began in 1997.
Paul Coghlan (Fine Gael)
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In fairness to the Minister of State, he knows that it did not.
Paddy Burke (Fine Gael)
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We should cast our minds back. Quite a number of people played significant roles in shaping the economy. Great credit is due to Mr. Alan Dukes who took a courageous decision to support a minority Government back in 1987. Credit is also due to Mr. Ray MacSharry who was Minister for Finance at that time. In addition, great credit is due to the rainbow Government which was in office from 1994 to 1997. In 1996 and 1997 the economy was creating 50,000 jobs per year, compared with an annual figure of 70,000 jobs now.
Paddy Burke (Fine Gael)
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It may be 93,000 this year, which is probably the highest. In 1996 and 1997, however, an additional 50,000 jobs were created, which was the start of the economic surge we have witnessed over the past number of years. When the current Taoiseach was Minister for Finance, he presided over the highest interest rates in the history of the State. As a businessperson, I remember paying 23% and 24% interest, although we currently have low interest rates. At that time, however, there was pressure on the former Minister from the Opposition to devalue so that interest rates would decrease. It took him a considerable period to do so and a certain amount of damage was done to the country in 1993 due to the delay in taking the correct decision.
I welcome the Minister of State's speech but I am worried about the BMW region. The Minister of State said, quite rightly, that some 461,500 jobs have been created since 1997. In addition, the number of women in the workforce has increased by 39% in that period. In the BMW region, however, there has been an increase of only 6% — some 26,000 jobs since 1997. We can go back to 1997 if the Minister of State so wishes.
In recent weeks, we have witnessed an underspend of €200 million in the BMW region. It is disgraceful to think that while almost 500,000 jobs have been created in the economy since 1997, only 26,000 of them were in counties Clare, Galway, Mayo, Roscommon, Sligo, Leitrim, Cavan, Monaghan, Donegal, Longford, Westmeath, Laois, Offaly and Louth. That represents less than 2,000 jobs per county created by the Government that claims to have done so much for the country since 1997. We all know about the jobs that have been lost in County Donegal in recent years.
Hardly a single job has been created in my own county of Mayo since 1997 when Deputy Enda Kenny, the leader of Fine Gael, was Minister for Sport and Tourism. We can see what the current Minister for Arts, Sport and Tourism, Deputy O'Donoghue, has done. He does not have an idea. No anglers are coming to the country despite the fact that we have the finest rivers and lakes in Europe. English anglers have boycotted the country this year and therefore I must treat the Minister of State's speech with a fair degree of scepticism. While the outlook for the country is great, there is no regional balance, particularly in the BMW region. It has all been spelled out for us today.
Yesterday, we heard all the bluff about the Atlantic corridor but no costings, good or bad, were included in the plan. We do not know whether that corridor will comprise a single or dual-carriageway system, nor do we know how much of that work has been carried out already. Some parts of that road have already been completed, yet the Minister for Transport gave the impression yesterday that a new route was being created from Derry to Cork and Waterford.
Paul Coghlan (Fine Gael)
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The Atlantic corridor bypasses Kerry.
James Bannon (Fine Gael)
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Senator Paddy Burke without interruption.
Paddy Burke (Fine Gael)
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We do know the priorities for the five interurban motorways which will link Dublin to Galway, Limerick, Cork, Waterford and Belfast via the Border. No costings have been done on anything, however. In his reply, will the Minister of State outline what will happen to the BMW region? If only 26,000 jobs have been created in the past eight years of unprecedented growth, it leaves much to be desired. The Government has done a lot for the country but it has abandoned the BMW region.
Martin Mansergh (Fianna Fail)
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I know it will be no comfort to Senator Paddy Burke, but I am booking a week's holiday in County Mayo with my extended family next year.
Paddy Burke (Fine Gael)
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Good. We will welcome the Senator with open arms.
Paul Coghlan (Fine Gael)
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We thought he was going to come back to Kerry.
Martin Mansergh (Fianna Fail)
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To be fair to the Fine Gael Party, it is participating in this debate. If the Labour Party stands for anything, it is employment. Unemployment held this country back for decades, but so far the Labour Party does not seem to have any interest in the subject of this debate.
The growth of 93,000 jobs is clearly a major achievement. My economic perspectives go back to 1987 rather than 1997. The year 1987 was, like the 1957-58 period, a major turning point in the country's economic fortunes. Back in the mid-1980s total employment was just under 1,080,000, while currently it is approaching 2 million. On the Order of Business, there was a reference to the achievement of a Government in doubling the national debt at that time. I look forward to the day when we will be able to say we have doubled employment over the preceding 20 years — I accept we will not have done so on our own.
It is important that we be accurate in our description of our economic history. There was a major turnaround in confidence in 1987. Ray Mac Sharry's name has been mentioned, and that of Alan Dukes has also properly been mentioned. The then Taoiseach, Charles Haughey, should also be remembered given that he led the recovery.
Reference was made by Senator Paddy Burke to devaluation being delayed. Our holding out for some time, as opposed to the approach in Britain, was the key to confidence afterwards. There was a very rapid decline in the high interest rates the Senator mentioned. One should remember there was a European currency crisis in which every country was affected. It was after this period that the Celtic tiger took off.
I am glad to welcome Senator Ryan, who has just entered the Chamber. Given his presence, I withdraw my preceding remarks.
Martin Mansergh (Fianna Fail)
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I believed the Labour Party might have been boycotting this debate — that is all.
The Celtic tiger took off in 1993-94 under the Fianna Fáil-Labour Party Government. To be fair to the rainbow coalition, it can be said that it sustained the growth. Growth was prolonged until 2001, which was far beyond what anybody could reasonably have expected. One can argue on the basis of the figures that such growth is evident again, albeit in a slightly more modest form. This should be celebrated.
I am a little puzzled by Senator Paddy Burke's remarks — I do not have the relevant statistics to hand. The increase in the order of 26,600 jobs pertains only to the past 12 months. The quarterly national household survey indicates that growth increased in the BMW region by 5.7% compared with an increase of 4.9% increase in the southern and eastern regions. I take the Senator's point and agree——
Martin Mansergh (Fianna Fail)
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——there is a problem with regional balance.
Under the rainbow coalition, practically all IDA funding in the period 1995 to 1997 was invested in the greater Dublin region, apart from a major investment in Clonmel and another investment in Cork. However, none was invested in the regions. I hope yesterday's announcement will contribute to more balanced development.
Senator Paddy Burke is quite correct in saying the Atlantic corridor is not a new motorway from Letterkenny and Derry. Substantial parts thereof are already in place, including the Limerick-Ennis section. The Ennis bypass is being built and the Cork-Mallow route has been developed. It is a question of completing this standard along the whole route.
We now have a very low long-term unemployment rate, namely, 1.4%, which must be nearly as low as is possible. We have the second lowest unemployment rate in Europe. The only country with a lower rate is Cyprus, which has a rate of 4.3%. This statistic pertains to the second quarter of 2004 — we do not have the most recent figures with which to make an international comparison. Our low unemployment rate represents a great achievement by everybody. The Government is entitled to some of the credit and the social partners are entitled to a considerable share of it. They will be conscious of the contribution they have made to transforming this country.
Reference was made by the Minister of State to the importance of educational investment. I fully agree with him in this regard.
I welcome the survey, which shows the progress we are making. It indicates we are basically on the right track but of course we can always do better.
Brendan Ryan (Labour)
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I will have to check the record to see what Senator Mansergh was saying about my absence.
Martin Mansergh (Fianna Fail)
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I was not referring to the absence of Senator Ryan in particular but to that of Labour Party Members in general.
Brendan Ryan (Labour)
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The degree to which Fianna Fáil worries about the Labour Party is one of life's more touching manifestations——
Rory Kiely (Fianna Fail)
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Senator Ryan should address the subject under discussion.
Brendan Ryan (Labour)
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Senator Mansergh felt free to make remarks about——
Brendan Ryan (Labour)
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The first point that needs to be made on reading the quarterly national household survey, or the Minister of State's speech thereon, is that we should all celebrate. Before I talk about the good and bad aspects of the report, I must say I would rather have the Ireland of today, with its particular problems, than the Ireland that existed when I joined the Seanad nearly 25 years ago. Perhaps I will list the present problems later but I will restrain myself to a degree and will not point fingers at those responsible. However, one should bear in mind that the country was in a mess in 1981. It was in a mess for a considerable period and stabilised in the period 1983 to 1987 in the teeth of considerable international problems. This was due to a combination of Mr. Haughey's leadership — I concede this — and that of a succession of good Governments up to 1997, in addition to the leadership of a Government which at least did not spoil it all from 1997 onwards.
The most fundamental point, with which Fianna Fáil has a considerable problem, is the degree to which consensus was built. Fianna Fáil has a difficulty with this because it likes consensus only when everybody agrees with it. It is not very keen on consensus when it is in Opposition. I remember the famous slogan that health cuts hurt the old, sick and poor, which was emblazoned on posters across the nation in 1987. When Fianna Fáil came into office, all the health cuts that had hurt the old, the sick and poor were not only retained but also made worse. Reference was made to the existence of a better approach but I remember the immortal words of a very well-known Member of this House who responded that Fianna Fáil said there was a better approach but did not say it would be easier. That Member is not present.
The problems of which we speak are the problems of prosperity. However, let us not listen for too long to the view that something dramatic happened in 1997 such that the country suddenly took off on a new track. No Government in the history of this State inherited an economy in better shape than the economy Fianna Fáil and the Progressive Democrats inherited in 1997. Some 50,000 jobs were created in 1997 and there was a budget surplus. Deputy Quinn's three years of stewardship in the Department of Finance resulted in an average growth rate higher than that which obtained during the period in which Mr. Charlie McCreevy was Minister for Finance. Deputy Quinn's term in office resulted in a lower average inflation rate than that during Mr. McCreevy's term in office.
We can all play games with the statistics and choose data selectively. For example, the Government likes to talk about the unemployment rate in 1997 but one does not have to have a degree in economics to realise there is always a lag between the beginnings of good performance in an economy and the reduction in unemployment — one has only to read and keep in touch with world developments to realise this.
Order in public finances, which results from a well-run economy, and business confidence must be restored because they are necessary preconditions for a thriving economy. They permit the gradual expansion of public services, leading to greater employment in the public sector, and the creation of a climate of confidence within the economy which encourages employers to employ more people and creates a climate in which it is possible to attract foreign direct investment. Foreign direct investment in turn generates employment. The achievement of business confidence is more difficult than creating order in public finances but is equally important.
I do not dispute the fact that the first two years of the Labour Party-Fianna Fáil coalition Government achieved many things. The portion of level-headedness contributed to Fianna Fáil by the Labour Party undoubtedly helped to produce rational economic policy.
Brendan Ryan (Labour)
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There is no disputing that Labour's experience in coalition with Fianna Fáil meant that it achieved even more success in its later coalition with Fine Gael, which is possibly a less exuberant and irrational party than Fianna Fáil. Both coalition Governments were successful and political scientists will be preoccupied for many years with the intriguing question of how this latter Government lost the 1997 general election.
Martin Mansergh (Fianna Fail)
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I will explain it to Senator Ryan.
Brendan Ryan (Labour)
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Senator Mansergh undoubtedly has an explanation for it.
Brendan Ryan (Labour)
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Matters which can be explained by Senator Mansergh are one of life's great entertainments but he usually produces a good quote or historical analogy to lighten proceedings.
The tragedy lies in the degree to which a Fianna Fáil-led Government was led down a cul-de-sac fashioned by the Progressive Democrats, which had between four and eight Deputies at different stages, for a considerable number of years. The priority given to exuberant tax cutting and inflation in the construction industry and the ideologically driven belief that the way to carry out business was through the private sector produced a paralysis in Government at a time when it was clear that resources were available. An example of this thinking can be seen in the provision of public transport and airports. The Government showed a disinclination to spend available resources and a most peculiar set of priorities. I do not wish to rehearse today's Order of Business but a significant number of the most highly trumpeted transport initiatives outside Dublin, such as interurban motorways, will now be four or five years late.
Other examples of these transport initiatives include the questionable decision to develop a radial motorway rather than a network of motorways to balance development. The overarching ideology was that of the Department of Finance, which has always believed that infrastructure should follow the market rather than create it. This is where the fundamental difference in policy between the Labour Party and the Government parties lies.
Terry Leyden (Fianna Fail)
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What slogan will the Labour Party use in the next general election?
Brendan Ryan (Labour)
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Our first slogan will be "It's not fair and we'll make it fair", while our second slogan will be "Let's get rid of the wasters".
Terry Leyden (Fianna Fail)
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What would happen if the Labour Party went into coalition with Fianna Fáil?
Brendan Ryan (Labour)
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The fundamental problem in Ireland is the deeply held perception of ordinary people that the way the country is run is unfair. Ordinary people on ordinary incomes — the 83% of taxpayers who earn less than €50,000 a year — believe that while the country got rich, matters worsened for them. The price of houses and child care has risen, the pressures people face in terms of commuting time have increased and they face problems caused by the appalling road and public transport infrastructure. All these factors add up to an unequivocal belief by ordinary people that the current situation is unfair, which is crystallised in the phrase "a rip-off republic".
Terry Leyden (Fianna Fail)
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A better way will not be achieved under a Labour Government.
Brendan Ryan (Labour)
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Nobody wishes to return to the way we were but there are problems that could have been anticipated, should have been planned for and should not have been allowed to multiply the way they did. The Government allowed these problems to multiply and it will pay the price for this by losing the next general election in a substantial fashion.
Tony Killeen (Clare, Fianna Fail)
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I would like to thank Senators and my colleague, the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Michael Ahern, for their contributions today. It is an important debate, not least because population and migration are not issues that we consider every day. These CSO figures show Ireland at a turning point and give us cause to reflect as a society on how we should build a sustainable future for both citizens and business.
The transformation of our economy that we have seen in these CSO figures shows that we have provided all our citizens with the opportunity to live and work here — emigration is, thankfully, no longer a necessity. Growth and prosperity have provided the country with a newfound confidence, while enterprise has the capacity to invest for the future and the confidence to be less risk-averse.
The latest 12-month employment numbers show that in the year to May, the economy created a further 93,000 jobs. This is the highest annual growth rate in five years, while unemployment is less than half the EU average. Long-term unemployment has been reduced by 70%. Cautious management of success has and will sustain our ability to make sustainable growth achievable.
The long stretch of prosperity has helped society. Life chances have consistently improved as growth has opened more varied opportunities for disadvantaged and vulnerable groups in many different aspects of the economy. The population figures and projections for the next 15 years also give us cause to reflect on the needs of our economy into the future.
Yesterday, the Government launched a major transport infrastructure plan. Modern economies depend on efficient transport networks to reinforce competitiveness. The level of infrastructure investment helps drive economic and enterprise performance and consolidates our attractiveness as an investment location. The roads programme announced yesterday will have the flexibility to address the access requirements of major new industrial enterprises as well as meeting transport needs around the country. I particularly welcome the announcement to proceed with the western rail corridor, which will meet the needs of communities from Ennis to Claremorris.
Sometimes, it is important to pause for a moment to reflect on what one is doing correctly. We can be justly proud of the achievements over the past decade. There is no greater indicator of success than being a sought-after location in which to work and live. The total migration flow to Ireland in the 12 months to April 2005 is estimated at 70,000 — the highest figure on record since migration estimates began in 1987. As a corollary, emigration is at it lowest since the series began.
The challenge is one of preparing now for the prosperity of the next generation and to manage the transformation of our economy through that process. This demands hard choices as we must, at the same time, seek to further improve the life chances for all our citizens, not just those in employment. From the Government's perspective, a successful society needs a dynamic economy, which constantly responds to the evolving demands of international competitiveness. We have proved that we can meet this challenge.
We would do well to remember that 80% of the current workforce will be in employment in 12 years' time, which is an enormous figure. It is clear that a large portion of these people will not be in their current employment, therefore there is a continuing need for people to upskill and prepare themselves for different kinds of employment.
I will refer briefly to points made by various Senators. Senator Coghlan referred to the need to maintain a strong manufacturing base. I can assure him that this is a key priority for my Department. Some low-skill traditional manufacturing is under threat and there have been considerable job losses in this area. However, we have proved our capacity to upskill our workforce and participate at far higher levels in manufacturing than before. It requires a capacity to innovate, retrain and be open to new challenges, which, fortunately, we have shown ourselves to be more than willing to do. We have a vibrant export sector which is, to a considerable extent, dependent on the activities of the foreign direct investment companies. We will continue to develop that sector.
I welcome Senator Leyden's lengthy comments on the transport plan. We have a good deal of catching up to do in this area and will need to frontload investment across a range of infrastructural services, particularly transport. I also welcome yesterday's announcement by various Ministers. We have gradually gained the confidence to believe not only that we have the capacity to pay for the infrastructure but to build on it and create a more successful economy and country.
Senator Bannon referred, among other points, to the need for greater participation in the pension scheme, with which I strongly agree because participation is worryingly low. I welcome the proposals from the Minister for Social and Family Affairs to develop this in the coming months but we must do considerably more.
Senator Hanafin mentioned various indices, apart from the quarterly household survey, which show Ireland performing well. I was surprised when I began to attend European Council meetings to discover the extent to which Ireland's success is admired by most of our European counterparts, particularly by the representatives of the accession countries.
Some of the traditionally strong European economies are experiencing grave difficulty in regard to unemployment and are examining closely the background to our success. I will do my best not to enter the debate which flowed back and forth between Senators Ryan and Bannon on one side and Senators Mansergh and Leyden on the other about the genesis of our success.
Senator Paddy Burke raised the issue of the performance of the BMW region. He assumed that the figure of 26,000 applied over several years, whereas Senator Mansergh may be correct in saying that it applied to only one year up to the end of last May. A figure of 26,000 out of 93,000 shows that the region is performing a little above its population base when compared across the economy, which is an extraordinary achievement.
Like many Members of both Houses, Senator Paddy Burke thinks that Clare is in the BMW region. It is not, for a variety of reasons.
Tony Killeen (Clare, Fianna Fail)
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He also said that angling tourism has suffered some difficulty but that is being addressed. It is a serious challenge to reach a consensus on dealing with all areas where there is difficulty.
The only point in the debate with which I disagree is Senator Ryan's comment that Fianna Fáil is not a party of consensus. When I turned the corner of Merrion Square today I saw the Labour Party's "Wasters" poster on display for the first time. That is hardly indicative of any great consensus.
Martin Mansergh (Fianna Fail)
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It shows a consensus with Michael O'Leary.
Tony Killeen (Clare, Fianna Fail)
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The poster prompted several thoughts including that its timing is good because we have 18 months to point out that it is incorrect. Senator Ryan made the reasonable point that many people feel the system is not exactly fair. It is a challenge to address that perception, if it exists. It does not reflect the major success of the economy, for example, the significant pay increases which have happened simultaneously with a drop in the level of the PAYE tax rate. Meanwhile, the rate of inflation has dropped quite appreciably.
Tony Killeen (Clare, Fianna Fail)
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They are extraordinary achievements. Like Senator Mansergh, I look at the 20 year period, from the mid-1980s to now, rather than the shorter one fashionable in some circles. This period illustrates the country's great economic capacity to improve and to achieve levels of employment which we would have thought impossible at that stage.
The high rates of unemployment in the 1980s and early 1990s were artificially low because many young people emigrated at that time. Had they been here the level of unemployment would have been far higher than it was. Unfortunately, because those people emigrated and made new lives in the countries to which they went, their potential contribution to this economy and society is lost.
One of the great advantages of the present situation is that we retain a high proportion of young people. With the exception of a few disadvantaged areas we are persuading them to stay longer in education than their parents did, and that educational attainment will benefit them in future. I am confident that those who will lead our society in a decade or so will move us on to the next plain. When we did not have them there was a significant deficit in our society.
Great credit is due to the leaders of the mid to late 1980s — Charles Haughey and Ray Mac Sharry made difficult choices in Government, and Alan Dukes in Opposition adopted a strategy which did not ultimately serve him well as an individual politician but served the country well.
5:00 pm
Tony Killeen (Clare, Fianna Fail)
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The country occasionally illustrates a capacity for consensus, dramatically so in the context of social partnership. Hopefully, it will be possible to enable the participants in social partnership to chart a way forward for the next three or four years, or whatever will be the length of that partnership.
I worry when people attack social partnership because I have never heard any of them present an alternate model that might come near replicating the success of this model. Surely the short-term difficulties at Irish Ferries and others, including Gama Construction, should be addressed by being put into the melting pot of the new social partnership arrangement. It is fair to say social partnership was critical to the economic improvement of the country and had a positive impact on workers' conditions, wages and on return for employment. It benefited employers equally by enabling them to make profits, some of which were re-invested and so on.
Partnership illustrates our capacity to widen what used to be a national wage agreement discussion into a social plan charting the way forward. Some of our colleagues in both Houses have reservations and suggest that some of the achievements and business of social partnership might more properly be the business of a parliament. The challenge to extend democracy is well met by including the social partners and the trade unions, which represent many people, making them centrally involved and influential in a way not possible in the narrow parliamentary tier.
The other social partners, the farming pillar and the community and voluntary pillar, can make a positive contribution in the next phase, quite different from that which they made in previous phases. Perhaps the challenge to them and Government will be to bring together the other partners at the employer and trade union level which are much further apart than was traditionally the case.
I welcome the excellent figures provided by the household survey and the range of other factors at play. These give us cause for considerable confidence and optimism, as long as we adopt a consensus approach and have the capacity to address difficulties arising from time to time.