Wednesday, 1 July 2009
That Seanad Éireann supports measures aimed at slowing and ultimately reversing the increases in the rate of unemployment, measures such as preventing job losses, redirecting the unemployed towards reskilling and further education and stemming long-term unemployment through subsidy measures to help with reintegrating them into the workforce. The economic indicators during an economic downturn are subject to scrutiny more than in any other period. Every time a set of indicators are released, and we have seen several in the past few days, most particularly yesterday with those from the Central Statistics Office, we look at aspects such as the rate of inflation, gross domestic product, gross national product, the level of debt in the country and the bank lending rate but I argue that the statistic to which we should pay most attention, particularly in this period of economic readjustment, is the rate of unemployment. We have come through a period in which employment numbers have increased markedly. The workforce increased from approximately 1.2 million to over 2 million, and has seen a decrease in recent months. There are several factors in regard to that, many of which relate to collapses in the economy, particularly in the amount of employment provided by the construction sector, on which we have learned we were far too reliant in our most recent period of economic prosperity.
This motion is an attempt to encourage all sides in the House to recognise the nature of this problem and discuss the methods needed to counteract it. I welcome the statement by the Leader of the Opposition in Dáil Éireann yesterday about his willingness to act in a collegiate way on it but I do not see much evidence of that in the amendment to the motion, which is more partisan than I would have liked but I will address that later.
My fear in regard to unemployment is that as a country we must avoid the mistakes of the 1980s in particular. The 1980s were the time of my generation. I finished full-time education in 1983. I subsequently went back to education part-time to do another course but for me the period between 1983 and 1989, when I got my first full-time job at the age of 26, consisted of periods of unemployment and, more particularly, employment schemes administered by a number of agencies. In the middle of that decade there were no less than four bodies responsible for redeployment and training of the workforce.
The first job placement I received was from the then National Manpower Service for which I received IR£30 a week, having come off unemployment assistance at IR£33 a week. Other agencies subsequently were involved in a myriad of schemes including teamwork, the social employment scheme, the community employment scheme with bodies like the Youth Employment Agency, what was then AnCO, the three bodies that merged into FÁS and a fourth body which I did not have personal experience of but for which I ended up working subsequently, namely, the National Rehabilitation Board, which also merged with FÁS subsequently. That merger was a mistake because there is always a need for a particular employment response for people with disabilities. The nature of those schemes had two effects, namely, to help with the unemployment figures but, more importantly, to give the participants a sense of self-worth and a curriculum vitae that would allow them compete in a more competitive workforce when the time came to do so.
We are at such a time again and the first rule of thumb should be that where jobs exist they should be protected. Whether they should be protected in all circumstances is a matter for legitimate political debate. When I was entering my early 20s there was a State agency called Foir Teoranta which existed to provide capital for companies to allow them continue in operation and keep their workforces employed. Its rule of thumb was to provide such capital always, regardless of whether such companies were viable or had long-term sustainability. That was the wrong approach but we are in a period where many viable companies are experiencing cash flow difficulties and the problems with the banks are adding to that. There is a need for various measures, whether it is direct Government subvention or funds available through the European Union to make such capital available now to protect existing jobs in the future. That must be done for several reasons, not only to stop the increase in the numbers of unemployed but to keep the value of the experience that exists in such companies experiencing difficulties. My colleague will refer to approaches in other European Union member states and how we can learn from that experience.
The other aspect is to provide money for retraining and redeployment. The Government's efforts in that regard are starting to take effect. The announcement last week about 2,500 places for long-term unemployed people to re-enter the education system is welcome. It could be argued that it is too small-scale, that it is just a start and that we must do this on a far larger scale but we are not only entering a period where the economy is experiencing a massive readjustment but where the new economy we will enter into subsequently will require a whole different skills set. That will require a degree of investment that we must address collectively in the political system.
The final element in terms of maintaining jobs is that we must redefine work. My recollection of the 1980s is the soullessness of unemployment, going to the unemployment exchange and later having the money paid through a local post office and while that diminished a person's worth as an individual, it did not offer any incentive to engage in other activity that did not have a direct economic value but had a value for society.
In addition to an economic approach we also need a social approach to give incentives to people either by way of particular incentives or additional payments through the social welfare system for work being done in the local community in the voluntary sense in particular, whether in providing particular types of social work or working with sporting organisations because there is an unacceptably large mass of people who are capable of providing great worth in our society and whose values as individuals are not being utilised to the fullest extent.
We must also recognise where we stand as an economy with other countries in terms of unemployment. The most obvious example of a more troubled country is Spain. Its economic collapse is similar to ours in that it had a huge reliance on property also but its level of unemployment is now over 4 million, which is 20% of its workforce.
We can even look at those countries that have a more strategic approach towards protecting work such as Germany. The statistics mentioned this week alone show an increase in unemployment in Germany to 8.3%. That country already has strong social protection measures in place which encourage its workers in difficulty to have tripartite arrangements among unions, employers and government to keep jobs in place, either by way of less work time or reduced wages until economic difficulties are overcome.
The purpose of the motion is to try to get across the message that we must first recognise the scale of our problem, work in a collective way to deal with it and use the potential, which is a difficult word to use in the context of such a large group of people, in making sure the mistakes made previously, particularly in the 1980s, are not repeated. It is a cliché that history is repeated and we never seem to learn from it but we are in a better position now in that we have achieved higher levels of economic wealth and even though that wealth has been markedly reduced in the past 18 months it is still a level of prosperity that as a country we have never experienced previously and which is still far higher than our previous periods of economic downfall. I hope the statement made by the Leader of the Opposition in the Dáil yesterday was made on those terms.
To return to the amendment, I would like to hear from those who will speak to the motion shortly the reason they framed an amendment that seems to mirror their own jobs document. The magic figure of 100,000 jobs is repeated like a mantra as if by doing that it will happen. The seriousness of the current position means we must offer people real prospects in terms of what needs to be done, how it can be done and when it will be done. Simply repeating the figure of 100,000 jobs does not mean it will happen. I would be more encouraged if political parties published documents relating to employment potential promising 63,594 jobs. The whole idea of magic numbers adds to people's cynicism about politics and public life and politics' ability to tackle real problems.
The statement made by the Leader of the Opposition yesterday contained a realisation that our current difficulties cannot be dealt with by the normal mechanisms. If the Green approach to economics and politics is different from that of other political parties it is because it is based on a consensual model. Others may, cynically, ask what we are doing in Government and why we divide this House on a regular basis. The people voted as they did in the 2007 election in an era of full employment when all political parties promised continuing economic growth. We are now in a totally different position. We recognise and acknowledge this problem and seek common approaches to it. That is the level of honesty which people expect of all of us in public life.
Because I was born in the United States, I had an opportunity in the 1980s to emigrate. I chose not to take that opportunity although most of my generation did so. These days, others do not have that option because we live in an international recession where such opportunities do not exist. We cannot expect other people to solve our social, economic and political problems. This is a problem we can only solve now, here and with our own resources.
I welcome the Minister of State and second the motion proposed by my colleague, Senator Dan Boyle.
This motion addresses the growing challenge of unemployment facing the country. We are all aware that the global community is grappling with an economic and financial crisis but that we have our own domestic strain of that crisis. We face an uncertain future and it is clear that growing levels of unemployment will be one of the major challenges for this and future Governments. If the unemployment trend continues we will see greater pressure on welfare systems and growing levels of social unrest throughout the European Union. That is undeniable. It is imperative that, as policy makers and as members of Government, we give the growing unemployment levels top political priority.
I propose to look at initiatives taken by the governments of five other member states, Spain, France, Germany, Austria and Denmark, to see what we can learn and rapidly implement in Ireland.
In Spain there has been the same kind of collapse in the construction industry as we have experienced. This downturn has been responded to through increasing public building programmes, initiating energy efficiency programmes such as retrofitting housing and providing land for public building purposes. Some 80 measures were introduced to improve employment between 2008 and 2009 and there have been different extensions to unemployment benefit. A local investment fund worth €8 billion and a special fund for the promotion of the economy and employment worth €3 billion have been established. Of them, €500 million is dedicated to environmental projects, €500 million for research and development and €400 million to upgrade police and civil guard stations. The Spanish Government has also allowed local governments to increase their permitted budget deficits from 0.05% of GDP to 0.5% of GDP, thus facilitating the injecting of a further €5.8 billion into the economy. A royal decree extended benefits to workers in special situations. Those temporarily laid off will be able to collect unemployment benefit, subsidies will be provided for companies which hire an unemployed person, as well as lower social security payments for companies which reduce employees' working hours instead of dismissing employees. Incentives will also be provided by the Spanish Government to companies which hire workers on a part-time basis, as the incidence of part-time work is still low in Spain.
In France, €11.4 billion has been allocated to reimburse companies in order to improve their capital and cash situation and to give them the resources they need to invest. This includes the early reimbursement of the research tax credit or value added tax from the start of 2009. The State will invest an additional €11.1 billion in a public investment programme which will include support for housing, with a two-fold increase in zero interest rate loan amounts, in addition to welfare support. A total of €4 billion will be invested by large public companies to modernise and develop the railway and energy infrastructure and the postal services. In addition, President Sarkozy has taken up a trade union proposal and announced the creation of a social investment fund which could allocate up to €3 billion for employment and vocational training.
In Germany, among the new policy measures adopted is the Pact for Employment and Stability in Germany: Safeguarding Jobs, Strengthening the Forces of Growth and Modernising the Country. A supplementary budget was also adopted to implement the pact. The focus is on safeguarding jobs and businesses' capacity to invest. The measures will markedly increase investment in future oriented sectors, with educational infrastructure at the forefront. It is also intended to supply credit to healthy competitive companies and further empower the workforce to gain qualifications. The total volume of the package of measures in the German public sector budgets in 2009 and 2010 will be almost €50 billion. Together with steps adopted in 2008, this represents total funding of approximately €80 billion to support the economy. Financial assistance has been provided by the Länder with particular focus on educational infrastructure, especially nurseries, schools and universities which make up two thirds of overall planned expenditure, and other infrastructure, particularly hospitals, urban development and information technology. A €100 billion programme of loans and credit guarantees will be implemented by expanding existing measures directed at small and medium enterprises and introducing a comparable loan programme for larger companies. The funding available to support small and medium enterprises and research and development projects will be extended in 2009 and 2010 with about €450 million in additional funding being provided per annum. The spread of broadband networks will be accelerated, guided by a comprehensive broadband strategy. Extra funds of approximately €2.5 billion will be provided by the German Government for activation, support and training measures for jobseekers, as well as short-time and agency workers, and 5,000 additional posts will be created at federal employment agency offices to improve placement of and provision of support to jobseekers. Income tax will be reduced. The statutory health insurance contributions paid in equal parts by employers and employees will be lowered. At the same time, a sustainable fiscal policy and a budget rule to put consolidation back on track has been adopted by the German Government, which will mean that new legislation on the lines of the EU Stability and Growth Pact will be adopted to impose a constitutional limit on net borrowing.
In Austria, the short-time working rules have been amended. In 2009, the Austrian Parliament endorsed an amendment to the short-time working rules with the aim of making them more flexible. This is due to a continuously growing demand by employers for short-term working arrangements to cope with the current economic downturn. Employers and trade unions have largely welcomed the decision. Under short-time working arrangements, working hours may range from at least 10% to a maximum of 90% of normal working hours. The introduction of a new short-time working scheme in combination with further training allows employers to receive a special training subsidy if they offer their employees, during the hours not worked, training course intended to improve workers' future employability in the labour market.
In Denmark, the practice of work sharing is growing extensively to help to mitigate the significant increase in redundancy during 2009 arising from the economic recession. The priorities for the Danish Government are enabling faster access to further training by increasing the funds available, establishing a national alert system to offer support as early as possible, increasing the monitoring of the labour market's development and introducing more flexible rules regarding work sharing arrangements.
The challenge at European Union level is to start examining how the European economy can be strengthened in a way that will increase job creation across all the member states. It is a little misleading to speak about a European economy at present because what we have is a Single Market with a collection of individual, national economies. The concentration at political level now must be on European-wide measures that will stimulate infrastructural projects of a scale that will have job creation benefits for all member states. My colleagues in the European Parliament have called for an EU-wide stimulus programme, a green new deal, to make €500 billion available over a period of five to ten years from both public and private sources. They have large, ambitious infrastructural projects in mind such as an EU-wide electricity grid and an offshore wind farm stretching from the North Sea to the Iberian peninsula. This is the way we should be thinking but political will across all member states is required, particularly in the member states whose economies are stronger and who will probably have to carry some of the weaker economies. We should be working at European level to promote that type of approach so a genuinely stronger European economy can emerge that will deliver much greater benefits to European citizens in terms of addressing the challenge of unemployment.
I move amendment No. 1:
To delete all words after "Seanad Éireann" and substitute the following:
"notes the limited job subsidy proposal put forward by Government will have little impact on Ireland's labour force and recommends a suite of job creation and protection packages such as PRSI breaks for new employees, a lower rate of VAT, the abolition of the damaging travel tax and the implementation of a modern infrastructure investment stimulus package to create 100,000 jobs over the next four years."
I thank my colleagues in the Green Party for putting forward this motion. It gives Members a valuable opportunity to debate and discuss what is undoubtedly the biggest challenge ever faced in this country. Senator Dan Boyle asked that we approach this in a collegiate manner, but I challenge him to cite a single instance in the past year where the Government has taken on even one suggestion made by the Opposition and implemented it.
Unemployment is a terrible blight on our society. It saps morale and erodes the dignity of our people. However, Ireland has managed to cultivate a unique version of this blight and it will be extremely difficult to eradicate. There are now almost 420,000 people unemployed and that rate of almost 12% compares quite badly with other countries. Senator Dan Boyle referred to Spain and Germany as being slightly worse off than this country but in the UK unemployment is heading towards 8% while in New Zealand, a country with similar circumstances to Ireland's, it is hovering between 5% and 6%. The CSO figures produced today show that the number of people signing on in June was almost 90% higher than in the same month last year, the biggest increase since records began in 1965.
Of course, every reasonable person would have to agree with the central tenet of the Green Party motion, the urgent need to implement measures aimed at slowing and reversing unemployment. Our economy is in freefall but where is the urgency in the Government's efforts to stem the jobs haemorrhage? The alarm bells were ringing loud and clear in March last year when unemployment reached levels not seen since September 1999. However, it was 15 months before there was any concrete proposal from the Government to intervene in the crisis. Two budgets were introduced and a panicking Government could only offer unimaginative tax hikes and a new VAT rate that drove shoppers north of the Border, wiped out even more jobs and left us down €700 million in VAT revenue.
Senator Dan Boyle referred to the 1980s and spoke of how he does not wish to revisit them - none of us does. My mother is a teacher and I recall her coming home from work, opening her pay and being utterly distraught and, at times, moved to tears by the punitive tax rates. We are beginning to head in that direction again and we must be careful in that regard.
On 24 June the penny finally dropped and, with much fanfare, we heard the half-hearted proposal to perhaps spend up to €1 billion on a jobs protection scheme. A week later, another 800 jobs are gone and there are no further details of the proposal, no specifics of any kind and certainly no mechanism in place to assist employers in retaining workers. Contrast this inaction and paucity of ideas on the part of the Government with the many initiatives suggested by Fine Gael in recent months. Fine Gael recognises, for example, the immense difficulties being faced by our small to medium sized enterprises, the backbone of our economy, which employ 800,000 people. These businesses need real and tangible support measures that can be implemented immediately.
Last year, Fine Gael proposed that employers who take on additional employees should be exempt from paying employer's PRSI for at least two years. With job losses set to continue, we now suggest that an employer who takes somebody off the dole and into a new job be able to claim a wage subsidy. This would be worth €6,000 and would be paid over two years. The wage subsidy would work in the same way as a PRSI exemption but would give employers more flexibility by allowing them to front-load the benefit.
It has long been recognised that the Government is the main culprit in driving up business costs. Central Government, local authorities, Government agencies and regulators have increased the administrative burden and increased charges, levies and taxes much faster than the rate of inflation. Businesses have been hit hard by rising fuel and utility costs, rising labour costs, increased local authority rates and charges for refuse and water. For decades, local authorities used the rate of inflation as a benchmark for increases in local authority rates. Ireland is now experiencing deflation, yet no local authority has cut rates. Fine Gael proposes to freeze all Government charges that apply to business and to freeze local authority rates for five years.
The cost of electricity to Irish businesses is the second highest in Europe, according to EUROSTAT, and gas costs considerably more here than it does in the United Kingdom, the place from where we purchase most of our gas. These high operating costs deter energy intensive companies from investing in Ireland. Last year, an IDA Ireland business attitude survey reported that businesses in Ireland found energy costs a significant negative in operating in this country. With all this knowledge available, the Government has dragged its heels in reducing energy costs and its regulatory system for energy is deeply flawed. The time has come to radically reform this system. First, there should be an immediate review of electricity and gas prices. The Commission for Energy Regulation has indicated that energy prices will be reduced in October. We will be haemorrhaging jobs from now until then at the rate of between 800 and 1,000 per week. If that is the position, why can energy prices not be reduced now? By October it might be too late for many businesses. Instead of fixing prices, the commission should set a price ceiling and let real and healthy competition occur in our energy market.
On Friday, 13 March, the Minister for Finance, Deputy Brian Lenihan, finally admitted that the recent VAT increase was a major mistake and that it had cost this country €700 million in lost revenue. Some weeks earlier his colleague, the Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, had described the increase as "a total disaster". While this newfound honesty from Fianna Fáil is to be welcomed, it still remains a mystery why the Government has refused to reverse that VAT increase. In our recent pre-budget document, Fine Gael proposed to reduce the higher rate of VAT from 21.5% to 21% and the lower rate from 13.5% to 10%. Was there a two-way street or collegiate approach? No, that measure was not taken on board.
Tourism in Ireland is worth approximately 4% of GNP per annum. Receipts from overseas visitors now top over €4 billion per annum. In January this year the CSO published new statistics on tourism numbers. They were very stark reading. In the year to November 2008, 156,000 fewer British visitors came to Ireland and 63,000 fewer visitors came from the US and Canada. There were 12% fewer trips to Ireland in November 2008 compared to the same month in 2007. How did the Government confront the challenge of dwindling tourist numbers? It imposed a €10 travel tax on everybody visiting the country. How did other countries react to decreasing tourist numbers? Belgium scrapped its travel tax, Greece reduced its regional airport charges to zero, Holland repealed its €12 per head tax and Spain announced a zero rate of airport tax for every airline that maintained its current level of traffic.
This is an enormous opportunity and challenge for Ireland. Growth in electronically delivered services across advanced telecommunications networks will dramatically outstrip growth in traditional trade in manufactured goods and agriculture. Every goal that Fine Gael has outlined in recent months is achievable. This country needs a long-term vision, a vision the Government seems to be incapable of producing. The Irish people will only react to real movement on the part of the Government. Life happens at the level of events, not of words, and the time for talking is over.
I second the amendment. In many of his contributions Senator Boyle asks for co-operation from this side of the House as if, in some way, we had the solution for the Government. The problem with the Government is that it clearly has not accepted the damage it has done to the economy or people's lives or that the solutions lie within itself.
We might consider a standard family income of €50,000 to €60,000 and the changes such a family has seen and will see with increased taxes, income and pension levies. If its members work in the public service they have had a public service levy. They will see increased VAT and there will even be levies on their VHI payments when legislation now going through the House is passed tomorrow. In the future there will be property taxes and changes to the children's allowance, a significant matter for middle class families who pay large mortgages, car loans and possibly credit card loans. They may have been living beyond their means just as this Government did but they have to do something serious about it. The Government, on the other hand, is doing nothing about it.
These conditions apply to everybody but it is among the middle class that the majority of floating voters are found and Fianna Fáil constantly looks to its vote. The middle class feels it has been crucified by the toxic trio of Government policy, exuberant bankers and developers who were looking to make the fastest possible buck. It is all gone now and the economy is in a mess.
Senator Boyle should stop lecturing us about what we will do and what policies we will come up with because it is becoming repetitive. The Government is failing to do its job. I shall spell it out for the Senator and have said as much before. He and his party are partners in Government. The local elections showed that the Green Party and Fianna Fáil are damned if they do and damned if they do not. They are damned if they make hard decisions and damned if they make no such decisions. Up to how, however, they have not made any decisions of any consequence and the country is not improving.
The Senator knows the deficit in public finances is in a mess. He knows many of the problems which need to be corrected have only been touched upon. He spoke about an bord snip nua which even Ministers have said they will think about over the summer. However, they will not have any discussion with members of the Opposition on whether these decisions are good or bad. The Government has run the country for the past couple of decades almost in secret. It decides that everything that happens is its responsibility and must fall to its decision. When matters were going well it was happy enough to take all the credit. Matters are not going well any longer and are in a complete mess. Look at the figures. Unemployment has reached 420,000. Subtracting what the multinationals take from it, our gross national product has contracted by 12%. Senator Boyle understands what that means. It is a disaster. All the time, our national debt increases by billions.
We have no sense, however, that the Government sees this as being the kind of crisis Members on this side of the House see it to be. Members of Government always want us to say what we would do but that is not our job. When the Government voted to elect Deputy Bertie Ahern as Taoiseach two years ago, it chose as its job to run the country for five years. It constantly claims this is its mandate but clearly refuses to accept that mandate. In the way politics is set up in this country, that mandate is such that the Green Party, Fianna Fáil and the few Independent Members they have tagged along with them will be the ones who make these decisions. They are not making them.
If it wishes, the Green Party can share that information with us and we will offer our opinion on it but it should stop treating the people stupidly by claiming we are the ones who must come up with the proposals. If the Government were to call a general election the people would weigh it up in the same way it weighed up the Green Party, Fianna Fáil, Fine Gael and the Labour Party prior to the previous general election. We increased our number of seats by 20. The Green Party held its own and Fianna Fáil lost seats. That was an indication that change was coming. That will matter.
When the Green Party tables motions and when its Members make speeches in this House it should point out clearly what it wants to do in the coming years. It should encourage its Ministers and coalition partners to publish what is intended to be done with the information from an bord snip nua and then talk to us about the kinds of changes it wishes to make. All we will see now from Fianna Fáil and the Green Party, apart from a few leaks that will happen over the summer to try to soften up the public, is what will happen on budget day. That will be like any other budget, kept quiet until the last minute. All the Members will come into the Dáil Chamber and the budget announcements will be made. No co-operation will be asked for or expected from the Opposition. That is the way the country is being run now.
The Government should focus less on what my party will do or what the Labour Party will do and focus on what it should be doing. That it does nothing is making an unbelievable difference. I am sure Senator Boyle understands exactly where this country is going. He was a Member of the Lower House when I was and he has a fairly good grasp of economic and social policy. He has a fairly good grasp that every day, with every moment of prevarication and time wasted talking and avoiding making decisions, matters are getting worse. The reality is we are borrowing €1.5 billion every month. We will borrow another €3 billion over the summer recess merely to keep the country going as well as watching the tax take continue to decline over the same period. We will watch people losing their jobs in addition to the 420,000 who have already lost theirs.
The Government is damned in any case so let it make the decisions. There is no point in expecting to be thanked politically for making hard decisions. That never happens. The Senator knows the history books and knows this never happens when tough decisions are made. No Government has ever been thanked for making hard decisions, and Fine Gael has been part of five Governments that made tough decisions. That is a fact of life. This Government will not be thanked either. However, it will be remembered for what it does to the country and if it destroys our economy further. It may take another ten or 15 years to come out of this recession while Green Party members sit on their hands and look for somebody to blame or to make decisions for them. That will be the worst legacy for a junior coalition partner to have as it takes the pain for the sins of its senior partners.
Dara Calleary (Minister of State with special responsibility for Public Service Transformation and Labour Affairs, Department of Enterprise, Trade and Employment; Mayo, Fianna Fail)
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I thank the Cathaoirleach for his good wishes and, in his absence, I thank the Leas-Chathaoirleach for his. I thank Senators Boyle and de Búrca for giving me the opportunity to speak to the House about the Government's labour market activation policies, which we have adopted and initiated in light of the present very difficult economic circumstances.
Everybody agrees that the present economic challenge is probably the greatest since the early 1980s. However, we should also acknowledge that the present crisis is being replicated throughout the entire world. We are not the only country to be suffering from the effects already outlined by Senators. If we look to our neighbours in the European Union and the United States, we can see that many countries are struggling in the same way as we are. To overcome our present circumstances, it is vital we continue to pursue appropriate policies to position Ireland and its economy to benefit from the global recovery when it eventually emerges.
One of the key competitive advantages we retain and should talk up is the skills and education level of our labour force which continues to be highly skilled and flexible. As a Government, we continue to invest in education and training at all levels to ensure we have the skills demanded by our increasingly knowledge intensive and flexible world economy.
The decisions taken by the Government in the supplementary budget are evidence of our continued commitment to supporting businesses and maintaining and creating a pro-business environment. The establishment of the enterprise stabilisation fund, which will provide €100 million to support viable but vulnerable firms over this particularly difficult economic period, is one of the central planks of that policy. Leaving our relatively low tax rates on businesses unchanged and continuing to adopt policies that enable companies to develop in these difficult circumstances are the remaining planks. I shall outline others later.
The Government has repeatedly proven itself capable of taking the necessary steps to safeguard our economy. We will continue to act in the national interest and take decisive action to secure our future prosperity, as we did in the budget and the supplementary budget.
While we retain many areas of competitive advantage, I acknowledge that the global economic downturn has significant implications for our economy. This is most evident from the sharp rise in unemployment. The figures published today show that the numbers on the live register are continuing to increase, with 418,600 persons on the register. As a public representative, I am aware that people, families and personal stories are being affected. On examination, however, 16,500 people left the live register in May because they found work. In the past 12 months, almost 145,000 people left it for this reason. While we are aware of the negative impacts of unemployment, it is important that we reflect on these figures to show that jobs are still being created in the economy. The spectre of unemployment, as Senator Boyle mentioned, and the human story are the reasons the Government is determined to do everything in its power to enable those who find themselves unemployed to re-enter employment as soon as possible by providing them with the necessary supports to overcome their present difficulties.
Given the increasing numbers of people on the register, the Ministers for Enterprise, Trade and Employment, Education and Science and Social and Family Affairs are working closely to ensure that appropriate and shared responses are developed and activated. This has led to the introduction of several new initiatives, including the development of the part-time third level education programme for the unemployed mentioned by Senator Boyle. Under this programme, 2,500 places will be available. Another example of a new cross-departmental programme is the work placement programme under FÁS, to which I will refer later.
The Government has invested substantial resources in addressing the unemployment problem. The Department of Enterprise, Trade and Employment alone is investing €1 billion in the provision of a range of labour force measures that will provide training and work experience opportunities to assist those who have lost their jobs. This has allowed our Department almost to double the provision of job search, training and work experience activation places available to the unemployed. In particular, the Department and FÁS have put in place measures to double the capacity to cater for the rise in live register referrals from the Department of Social and Family Affairs. The implementation of these measures has increased the annual referral capacity to 147,000 persons this year. These measures and others represent a significant step in meeting the considerable challenge of supporting the unemployed.
In a difficult climate such as that which we face, the importance of training and education is vital for everyone. The impact such opportunities can have for those who are out of work and are seeking to rejoin the labour market cannot be overstated. To assist individuals through the provision of education and training opportunities, our Department has almost doubled the number of activation training and work experience places provided by FÁS to 128,000 this year. This represents a substantial increase on the 66,000 places available at the end of 2008.
In the supplementary budget, the Government announced its intention to establish a programme that will provide valuable work experience to individuals who are unemployed and who have had limited experience to date. The Tánaiste and the Minister for Social and Family Affairs, Deputy Hanafin, jointly launched the work placement programme. It will provide 2,000 individuals who have been unemployed with a six-month work experience placement. Two streams each consist of 1,000 places. The first stream is for graduates who before this year have attained a full award at level seven or above on the National Framework of Qualifications and who have been receiving jobseeker's allowance for the past six months. The second stream is open to all other individuals who have been receiving jobseeker's allowance for the past six months. Under this stream, 250 places are being ring-fenced for those under 25 years of age.
As a result of the co-operation and dialogue between the two Departments, the scheme has been innovatively designed to allow participants on both streams to continue to receive their existing social welfare entitlements for their duration on the programme. FÁS is administering the programme and is now taking applications from providers and individuals who may be interested in participating.
Another cohort of the unemployed who require specific support are redundant apprentices. I am fully aware of the difficult situation in which they find themselves. Without placements, they would not previously have been able to complete their apprenticeships. Our Department has introduced a number of specific initiatives to assist up to 3,600 redundant apprentices to complete their studies. For example, 2,000 apprentices who have been made redundant can progress to the next off-the-job training phase in the education sector without completing their placements. FÁS has introduced an employer-based redundant apprentice rotation scheme to provide support for employers to provide on-the-job training to 500 redundant apprentices. ESB Networks has agreed a programme with FÁS to provide on-the-job training to 400 eligible redundant electrical apprentices at phases five and seven. The institutes of technology are also providing an 11-week certified training programme for up to 700 redundant apprentices who have completed their phase four training but where another training opportunity is not currently available to them.
Support for jobs and those who have lost their jobs must be at the centre of our collective effort. For this reason, we need to be imaginative and break new ground in intervening to sustain jobs. Last week, the Government presented proposals to the social partners that focused on measures to prevent job losses. These included the introduction of a temporary employment subsidy scheme, which aims to help employees retain their jobs and employers to maintain their skilled workforces. It is proposed that the scheme will be for manufacturing or internationally traded service companies that were not in difficulty on 1 July 2008. In addition, companies that are to receive the temporary employment subsidy must be judged to be viable entities and capable of growth in the global upturn. It is proposed that €250 million will be allocated towards this scheme, which should provide support for up to 30,000 employees who would be in danger of losing their jobs without this intervention.
The Government intends to engage further with the social partners to develop other innovative approaches to maintaining employment, creating new employment and early and active engagement with those out of work, including any lessons arising from implementation of this and the other schemes on which I have given details. We will continue to explore the possibility of further expanding the range of programmes that are currently available, including those that have existed for a number of years but that I have not mentioned, to ensure we are able to meet the needs of the increasing number of people who are unemployed. As an economy and a nation, we are in an unprecedented time. Overcoming our difficult economic problems will require all Members of the House and everyone in society to make a positive contribution so we can determine how best to assist our economic recovery bid in getting those who are on the live register back to work.
I regret that Senator Twomey has left the Chamber. Senator Cannon proposed ideas, but Senator Twomey's personal attack on Senator Boyle was not the kind of response that will assist anyone in getting a new job. The Government will make the necessary difficult decisions over the next few weeks and months and will provide the leadership and example that is necessary to place us firmly on the path to recovery. During recent campaigns, the other side of the Chamber politically exploited our tough decisions to date. Nevertheless, we will continue to take those decisions in the best interests of the country and the people.
I will join the debate from a specific angle because it could be a wide debate. The Minister of State has honourably and honestly put on the record of the House a serious situation, namely, the more than 400,000 people who are unemployed. It is a catastrophic situation that we would not have contemplated some years ago. What will our response be? I will not savage the Government and there will be no personal attacks from me. I have the greatest regard for Members on the other side, particularly Senator Boyle, who is constructive.
I want to examine the debate from the point of view of tourism, as it is all I will be able to address in my time. I will highlight a number of matters that the Minister of State should take up. Will he do so? I will start with something that is close to my heart, namely, the College of Catering at Cathal Brugha Street. I am an admirer of the Dublin Institute of Technology, DIT, and the Cathal Brugha Street college in particular. We always had the best ingredients - fish, fowl and meat - and a wonderful environment, but we made a comprehensive hash out of them because our cooking was so rotten until the college came on the scene.
There is a degree of academic snobbery in the proposal to reorganise the college. It is being reorganised to downgrade tourism and split it between other Departments as part of the process of DIT looking for university status. While I agree that it should have that status, particularly by the time it arrives at the Grangegorman site, what it is doing is dangerous. The Minister for Arts, Sport and Tourism and the Minister for Education and Science should be contacted to ask the governing body of DIT, at a meeting to take place on 15 July, to reconsider the fragmentation of the faculty of tourism and food. It is proposed to split up the three schools that constitute the faculty of tourism and food, including the school of hospitality, and they are to be moved into different sections. There will be no coherence or co-ordination. This looks like the disastrous policy of decentralisation but it is a policy of disintegration. It is a recipe for incoherence and it will definitely threaten the impact of this remarkable institution on tourism.
Why is tourism important? If one considers the World Travel & Tourism Council facts about Ireland, in a report dated March 2009, one will note the contribution of travel and tourism to Irish GDP is expected to rise, even in these difficult circumstances, from 6.5% in 2009 to 6.9% in 2019. In these awful times, that is significant. The contribution of tourism to employment in Ireland is expected to rise. The number employed is anticipated to rise from 122,000 in 2009 to 159,000 in 2019, a ten-year period. That is a lot of jobs. The contribution of tourism to economic growth should be considered.
There is no financial imperative for the fragmentation, nor is there a coherent academic argument therefor. It will just cause a split. It would be very good for the Minister to ask that this proposal be reconsidered. I will be supported in this regard by my valued friend and colleague, Senator Coghlan. We tabled a motion on this side of the House asking for this to be discussed in detail but I had to raise tourism this evening because it is crucial to employment. I want the matter examined before the meeting on 15 July.
The Minister should consider a letter in The Irish Times on Bloomsday, 16 June 2009, signed by Darina Allen, Derry Clarke, Richard Corrigan and others. They know what they are talking about in respect of food and tourism.
I love the Abbey Theatre and I have ideas on its relocation that I will not elaborate on now but I will refer to an interesting development that concerns it. Is the Government aware that there is a proposal to close the set design and scenery construction workshops in the theatre and outsource them to the Untied Kingdom? That is extraordinary. Thirty jobs are to be lost at our national theatre and handed over to the United Kingdom. Three reports have been commissioned on this by three professional assessment consultant companies, the first of which is Long Road Productions. The first line of its report states the theatre should maintain and develop its own scenery workshops. While there may be some difficulties associated with this and while it would be cheaper to have the work done in the United Kingdom, from where one would obtain superb product, we must ask whether we have no pride in our own talent. Should we not develop it rather than close the workshops and cause redundancies in a period of so much unemployment? Closing the workshops puts the Abbey at the mercy of current scenery suppliers and outsourcers in Britain. This is disastrous. Why not develop the young talent? There should be an in-house set building and scenic design workshop of the highest standard. One way of achieving this is to revisit the idea of apprenticeships. This is where one can give hope to young people in this area of the arts.
I was downstairs earlier this afternoon listening to very remarkable people, including former ambassador Ms Mary Whelan from the Department of Foreign Affairs. She was talking about the impact culture can have on exporting. If one considers branding, one will realise the Abbey Theatre is known all over the world, as are James Joyce, U2 and Sinéad O'Connor. They give us an identification and personality in terms of selling material. We should concentrate on making the Abbey Theatre an institution that is really iconic, recognised all over the world, and that fosters our own native talent.
I totally support Fiach MacConghail, the director of the Abbey Theatre. We are extraordinarily lucky to have a man of such unbounded talent and ideas. He has, within a limited budget, reorganised the theatre. He turned it from a barn into a real theatre by way of the wonderful raked auditorium. I welcome the fact that the Abbey is increasing the number of productions. That may lead to some difficulties with getting the scenery in on time but, in spite of that, apprenticeships should be reintroduced and endorsed. We could start designing for other groups, including RTE and independent television production companies.
When walking down Grafton Street yesterday I was handed a piece of green paper by some workers outside Thomas Cook. The company is being closed down, yet it just announced profits of €400 million. Why is it closing down? Many jobs will be lost and families will be put under strain. At the same time, the CEO of Thomas Cook, Mr. Manny Fontenla-Novoa, has just given himself a 34% pay rise and a bonus of €7 million. This is the reward he gives to workers for boosting the company's profits. He will make 2,000 low-paid workers redundant throughout these islands. What the company will have to pay to sack the workers is less than one tenth of the CEO's bonus. It is pulling out of the Republic of Ireland after 120 years. It would be good if we could contact the company and state it was once reputable and honoured and respected by its customers but that it does not deserve respect for the way it is treating Irish workers.
I welcome the Minister of State, Deputy Kelleher. I am sorry my constituency colleague, the Minister of State, Deputy Calleary, left some moments ago. I would have been delighted to have the opportunity to welcome him to the House this evening.
I welcome the tabling of this motion by Senators Boyle and de Búrca because it is very important at this time. As we all know, due to global recession, there has been a huge rise in the number of people unemployed. According to the Quarterly National Household Survey, the number of people in employment has fallen to 1,965,600, which represents an annual decrease of 158,000. This is the first time since 2005 that the number of people in employment has fallen below 2 million. The sectors of the economy that have experienced the sharpest decline in full-time employment in the past year are the construction industry, which has seen a fall in the order of 77,000, the wholesale and retail trade, the motor vehicle repair sector and industrial sectors. However, each of these sectors experienced a small increase in the number in part-time employment.
I am delighted that the Minister of State, Deputy Calleary, stated the Department of Enterprise, Trade and Employment, the Department of Education and Science and the Department of Social and Family Affairs are working closely together to ensure appropriate responses to meet the up-skilling needs of those who are losing their jobs or facing uncertain employment prospects. In his speech, the Minister of State mentioned quite a number of measures the various Departments are adopting. He referred to training, the employer-based redundant apprentice rotation scheme and new institutes of technology training programmes for 700 redundant apprentices. An additional 400 places provided in the April budget will increase the number of places on community employment schemes to 22,700 this year.
The Green Party Senators will be delighted to hear that a company called BioSpark, a newly formed joint venture between Imperative Energy and Sustainable BioPolymers, has announced its intention to invest €40 million in the development of a next-generation bio-processing research, innovation and manufacturing centre in Claremorris, County Mayo. It will create 180 new high value jobs within the local and regional economy with the realistic potential to grow to 300 jobs within three years.
Yesterday I attended a meeting of the Oireachtas Sub-committee on Job Creation through the Use of Renewable Energy Resources where Joe O'Carroll and Peter Doyle of Imperative Energy gave a very good presentation on how to create employment through renewable energy. A most interesting debate took place. I welcome those people coming to do that kind of work because it shows there are initiatives and that the Government is prepared to facilitate and help them.
The company will have a 20,000 tonne per annum bioprocessing facility in Claremorris, state-of-the-art laboratory facilities for bioprocessing research and innovation and 17 commercial units to house a cluster of related business centres. This will be of great benefit to south Mayo and east Galway.
I welcome the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Kelleher. I thank the Green Party for tabling this motion. I am interested in how to deal with the unemployed, address the problem and reverse the trend and prevent job losses. I will concentrate on the areas in which we can help to re-train, upskill and perhaps send people back to education in the short term while we await the global recovery. If there are no jobs we do not want people walking around the country, as it were. We must facilitate them in some way. I am glad to see that efforts are being made to launch programmes and courses that might fill that gap by training and upskilling people, making them ready for jobs that become available in the next few months.
Many of these young and not so young people are highly skilled and educated. Very few in the world of work do not have a leaving certificate or have finished education at the age of 14 or 15 with a group certificate or vocational training. They are all highly educated to cope with job loss. Therefore, we must help and co-ordinate with them to find a way to match what they have at the moment and how we can re-think their futures.
I am glad to see that FÁS has come forward with some plans such as the pilot training schemes for workers on a three-day week. They have two days off and therefore need some upskilling. It is a great opportunity for those who have two free days to go into FÁS. The programme runs for 52 weeks and will help them to improve their job opportunities, move from one area to another and perhaps change their job style.
I am also interested in the new programme which the Ministers for Enterprise, Trade and Employment and Social and Family Affairs have launched. I am glad that they are co-operating on the work placement programme which deals with graduates and those under 25 years of age. It facilitates those who are highly trained and educated and those under 25 who need to top up their skills. That is a very important course.
Am I running short of time already?
It is great to see that there is co-ordination between the three Departments. For a long time there was none, especially between FÁS and the Department of Education and Science where many programmes were duplicated and a great deal of money was wasted. I am glad that day is over and that FÁS is working with the Irish Vocational Education Association, IVEA, and there will not be duplication. FÁS will not in any way complement or duplicate the back-to-education, post-leaving certificate and vocational training opportunities scheme, VTOS, courses. I am glad to see that opportunities are available. We have a long way to go but at least we have started and we will reverse the trend so that we will be ready when the global recovery comes.
I welcome the motion and the amendment and I welcome the Minister of State to the House for the debate. Holding jobs in the appalling circumstances we are in is vital. We need a suite of measures such as this amendment recommends and PRSI breaks to enable employers to keep employees and increase their numbers. The amendment is timely.
Several tourism interests have been in contact with me and my dear friend and colleague, Senator Norris. Coming from Killarney I am vitally concerned about the integration of food and tourism. These are highly important areas for us. The connection between food and tourism is crucial to employment. I do not see any sense in fragmenting the faculty of tourism at the Dublin Institute of Technology, DIT, as proposed. It is important for retaining jobs and, one hopes, creating new ones that we are seen to do everything possible to assist and encourage the industry. Hoteliers in my part of the world are very concerned and believe this proposal will impact negatively on the area and sector.
I support Senator Norris' proposal that the Ministers for Arts, Sport and Tourism and Education and Science request the governing authority of DIT at its meeting on 15 July to revisit and reconsider the proposed fragmentation of the faculty of tourism and food. This is a proposal to split up the three schools that constitute the faculty. The school of hospitality management and tourism will be moved to the business faculty while the schools of culinary arts, food technology, food science and environmental health will be moved to the science faculty. In doing this the word "tourism" will be removed from the title of the DIT faculty. That would be a retrograde step. This demotes the position of tourism at institute level when global projections state that tourism is one of the sectors with greatest potential for recovery in recessionary times.
Senator Norris cited the World Travel and Tourism Council facts about Ireland from a report dated March 2009. I support what he said in that regard. We believe that the restructuring of DIT is being undertaken in a rushed and poorly considered fashion. The main objective of the project appears to be the reduction of faculties from six to four by merging engineering and built environment and by fragmenting and eliminating the faculty of tourism and food. I wish to take the strongest stand I can on this project and I hope the Minister of State will be able to intercede with his colleagues on it. All we are asking is that the institute would consider the views of experts and organisations in the broad tourism and food sectors and to do so in light of the Government's drive to reinforce the tourism and food sectors. We believe that the recent decision of the governing authority to ratify the restructuring is contrary to any tourism and hospitality industry view and ignores economic, employment and development facilities policies for Ireland.
Senator Norris went into greater detail on some aspects and I will not repeat what he stated. However, it is acknowledged that the tourism industry is well positioned to be at the vanguard of recovery once there is an upturn in the global economy. Tourism is one of our few indigenous industries and with its quick recovery potential we have no doubt that the currently aligned faculty is well placed to benefit from a future recovery and even to assist the country to plan and prepare for such a recovery. However, it is felt that the restructuring proposal will seriously hamper the development of a holistic tourism and food industry and in the strongest way possible I put forward those points for consideration. The Ministers involved can have the desirable effect if they put forward this view, which should be put forward, in the national interest to protect our tourism and food sectors. This proposal is in conflict with Government policy and it should be reversed to be in line with what is the proper national approach.
Hoteliers involved in tourism in Killarney and throughout the country feel very strongly about the great training in Cathal Brugha Street and believe that the proposal to fragment it is ludicrous and needs to be reversed. I urge the Minister of State to use his good influence in this regard. We are concerned about job protection and job creation.
I welcome the Minister of State, Deputy Billy Kelleher. I thank the Green Party for providing us with the opportunity to say a few words on this topic. Unemployment represents a serious situation for the entire country as we see the number of people affected rising every week, albeit at a lower level now than was the case a number of months ago. It is still of concern to the country as we are heading towards 500,000 people on the unemployment register.
There are a number of areas which we could examine to generate employment. The Government should further examine the tourism and catering industries as significant jobs could be created in these areas. The VAT rate on food is particularly high and should be reduced. The 21.5% VAT rate should also be reduced and this would generate a certain amount of activity in the economy and kick-start it for people to generate jobs. We also have a concern with regard to the 50,000 to 60,000 graduates leaving college now with nowhere to go and no employment. Years ago, there was a safety valve in that they could go to England or the United States. At present, a significant number of students is going to Australia on a backpacker's visa but it seems to be the only safety valve for our people.
Much can be done in the tourism industry in particular. Deep-sea fishing has not been developed in this country. We have a significant number of small ports dotted around our coastline and we could have an industry to create and generate a significant number of jobs.
Quite recently, we saw the hotel industry drop its rates and this is due to pressure from the industry and to a lack of disposable income. We have also seen a reduction in golfing green fees throughout the country. The country could become more competitive but the tourist boards and the Government must get together to package the country as a destination for holidaying, not just for golfing but also for activities such as deep-sea fishing.
Walking represents another possibility. Northern Spain has particular walks where one can get on and off the trail. This could be developed around our coastline whereby one could get on the trail in Mayo, Donegal, Galway, Clare or anywhere on the coast. However, it needs to be pulled together. A former member of Mayo County Council, Paddy McGuinness, had a provision included in the estimates for Mayo County Council to provide funding for a development officer to develop walks in the county and it is working very well. A number of walks have been developed in the county.
Throughout Europe, the walking industry is a big growth area but if anything is being done in this country it is on a very small scale. We could develop that here. We have a great climate for walking as it is not too hot. One may get wet but when walkers are slogging it out the rain does not seem to play a big part for them. Services must be provided along such routes and we do not have them in place. We do not have catering facilities all around the coast and we do not have accommodation in some of the remote areas. The Government, with the tourist boards and local authorities, could develop this and it could be a real growth area. People could come here for golfing, walking and fishing, and a significant number of jobs could be delivered through this.
In the short term, the Government should examine the VAT rate. While the VAT rate on food does not seem very high at 13.5%, it accounts for 13.5% of every euro taken in by the catering industry and it must be considered with the high wages and all the other costs the catering industry has to pay, such as rates, water charges and refuse charges. On another occasion, we discussed the fact that the industry must pay out to 14 different agencies. This amounts to an enormous sum and at the heel of the hunt, it is why we are uncompetitive. We have too many costs. VAT is the direct responsibility of the Government and it could intervene and help promote and generate growth in the economy.
I welcome the Minister of State, Deputy Billy Kelleher, to the House and wish him well in the Department. I was there and it is a demanding role, particularly at present. I commend our colleagues in the Green Party on tabling the motion to highlight the situation. The timing is very appropriate given the unfortunate announcements today and the number of people who are unemployed. It is a frightening statistic and we should all do our utmost in a united approach to try to resolve the issue.
The commitment given by the proposed coalition of Fine Gael and the Labour Party in 2007 stated:
Our manifesto commitments are fully costed and affordable in the context of the prudent budgetary assumptions drawn from the most authoritative economic sources. The Economic and Budgetary Framework agreed with Labour provides for continued government surpluses, and a reduction in net debt to below 7% of GDP by 2012. Can someone tell me when it discovered things would go as bad as they have gone? This is the type of myth that has been painted for some time.
I want to put this on the record. I get tired of statements from Fine Gael that it could foresee the future and knew that there would be such a downturn in the economy. It went on the basis of the facts and figures we had available to us, no more and no less. It had the assumptions and proposals and I got the manifesto. I had a job getting it because it is becoming a very difficult document to find. It would be easier to get The Da Vinci Code. It is gone from the Fine Gael website and I am not surprised. It has been left aside because there is a lot of information in it which Fine Gael would not be able to stand over now.
I want to be clear that we are all in this together. In 2007 we were all looking forward to continued growth and development. I can quote the manifesto line for line and section by section. It was not far away from the Fianna Fáil and Progressive Democrats manifestos at the time. Most of the promises are very agreeable because they are all about growth and more money. It states Fine Gael would cut the standard rate of tax by 2%, from 20% to 18%. That was definitely an indication that it could foresee the future. It states Fine Gael would abolish stamp duty for first-time buyers of homes up to €450,000, there would be no stamp duty on homes up to €100,000, a 5% rate on the next €350,000 and a 9% rate on the balance. I can discuss all of the manifesto and the figures projected at the time of the general election. They were very attractive. The amount of money available to spend on day-to-day commitments in 2009 is mentioned.
The reality is that nobody could see the future at that time. We are where we are now and we have to try to work our way out of this situation. I believe in a united approach. We took hard decisions in 1987. I was a Minister then and it cost me my seat in Dáil Éireann, but we had to pay the price of those decisions. At the time Charles Haughey was Taoiseach and Ray MacSharry was Minister for Finance. We worked together and I have to commend Alan Dukes on the Tallaght strategy.
We let him down because we did not agree to the Private Members' motion in the Dáil at the time on providing funding of £400,000 for haemophilia sufferers. We should have agreed to it but we did not. Alan Dukes was very courageous in his approach in that regard and gave us an opportunity to continue with very hard decisions.
There was a 10% cut across all Departments, including the then Department of Health. It was very difficult to sustain it. Now we are where we are. We need to look at this, not from the point of view of the blame game, but from the realisation that nobody was in a position to foresee what would happen in 2009 and the downturn in the world economy. We must start with the American situation. When America gets a cold, we get the flu. That is a reality of life. It is a very important trading partner and player in the world economy. The whole banking industry has fallen apart as a result of that.
What the Government is doing, as far as banking is concerned, is the only action it could have taken and has taken. We are very fortunate we had set aside the National Pensions Reserve Fund because only for it we would be in greater difficulty. That was very prudent and perhaps we should have put more savings into it and set aside more money for a rainy day such as we did not foresee. That money has kept the banks open and without it we would not be in a position to keep them open.
We now have to look at the different opportunities we have. We had more than 2 million people employed, which was a marvellous achievement. Employment doubled over the past ten years the Government was in power. We now have to maintain the jobs we have and to try to improve and increase further production. Enterprise Ireland, the IDA and the Minister of State's Department have a very important role in this regard. They must ensure we maintain the jobs in the economy. We have some tremendous employers and multinational and domestic industries in the country that are working very hard and are surviving the recession.
Boston Scientific in Galway is a massive employer. Intel and other companies are playing a very important role in Ireland and we have attracted and retained multinational companies as far as we can. We have to continue the policy of bringing in industry to the country. We need that support from abroad. We are located at the gateway to Europe and have a very solid political system which attracts investment. We have a guaranteed political system with a democratic approach and whatever Government is in power will continue it. That gives great stability to investors from abroad.
We must ensure our costs are reduced dramatically. We have outpriced ourselves and have the highest minimum wage in Europe. We are not competing with our neighbours in the UK because its structure is completely different and we have overpaid ourselves in every area. Action is now being taken by the Government to try to reduce national expenditure.
The Green Party is a tremendous boost because it was looking ahead and could see the future as far as renewables are concerned. The emphasis on wind and solar energy and a reduction in the imports of fuel are all part of what we can do to build a new economy. I complement the Green Party on its support and involvement in Government, and also former members of the Progressive Democrats who are part of this Government as well. One appeal I make to all sides of the House is to come up with constructive proposals on maintaining and creating jobs for the future. We can and we will work ourselves out of this situation.
Last week I spoke to the president of the European Bank for Reconstruction. In 1987, interest rates were 18%, inflation was 18% and unemployment was about 18%. We worked ourselves out of that situation. Inflation is nil and interest rates are very low. Unemployment, unfortunately, is rising. We have to work together in the Oireachtas for the people of this country to ensure we have a future. I believe we will have a great future and will work as a team in that regard.
Cuirim fáilte roimh an Aire. Tacaím go mór leis an rún seo ón gComhaontas Glas mar a thacóinn le h-aon rún agus laghdú sa ráta dífhostaíochta mar aidhm dó.
It is very easy to say, and we hear many people saying, that the Government is not doing enough to slow and reverse the increases in the rate of unemployment. Regardless of whether it is doing enough, it is clear the response to the national economic collapse and the consequent job crisis must be seen to have urgency, focus and a clear sense of direction. It is one area where style matters almost as much as substance. It is one thing to have a plan, but it is vital to communicate properly the sense that there is understanding at the highest level of the scale of the crisis, that there is a clear plan to address the challenges we, as a nation, face and that the conviction and the skills to implement the plans exist.
We need to understand what we are facing. Ireland, like everywhere else, has been a victim of the global credit crunch. However, the Irish case has been exacerbated by a property market bubble and reckless lending policies which have brought the banks to the verge of ruin. The bursting of the property bubble has led, as we all know, to the collapse of employment, not only in the building trade but across the professions, especially those which had become dangerously dependent on the sector. When one factors in the severe depreciation of sterling vis-À-vis the euro, which has made Irish exports to the UK far more expensive, and the obvious unpleasant reality that this hit small, indigenous Irish exporters who are still dependent on the UK as their major market very hard, in short, the Irish economy has been hit by the perfect economic storm.
It is important to grasp not just the sheer size and force of the storm but the speed at which it hit. All the indications are that the Irish economy fell off a cliff in or around April 2008. The speed is important because it has meant it has been very difficult for companies to adjust to the rapidly changing business environment and many, as we know, have failed to do so and have gone to the wall.
The speed with which the crisis came about demands a similar speed in the response of the Government, but it is a political argument as to whether there has been a sufficiently speedy response to date.
To be fair to the Government, when it has not been back-pedalling following some hastily thought out initiative, it has taken some worthwhile measures. I welcome recent announcements that the Government will spend €250 million on job protection on a "temporary employment subsidy scheme". However, the job subsidy will only apply to 30,000 workers in the first instance, giving them €200 per week for 15 months. I also welcome the announcement by the Minister for Education and Science, Deputy Batt O'Keeffe, that unemployed workers will have access to 2,500 new places on part-time undergraduate and postgraduate courses from September, as part of the Government's efforts to retrain and upskill the labour force.
I respectfully point out, however, that we are only talking about 2,500 places, at a time when a record 372,800 people are signing on for jobseeker's benefit. While €250 million may sound like a lot of money, when one recalls that the Government spent €220 million on the ill-fated PPARs project, we see it in a different perspective. One cannot help thinking the Government is applying a sticking plaster to what is a gaping wound. I do not wish to be mealy-mouthed about it and I commend the Green Party on the focus on education and reskilling in the motion before the House.
Most commentators have been struck by the fact that the recession is hitting the professions and the middle classes very hard, but what is most remarkable is the impact of the recession on youth unemployment, specifically among young men. Seán Ó Riain, the NUI Maynooth sociologist, recently pointed out that in the latest quarterly national household survey the major trend that stands out is the disastrous collapse in working class employment, with growing differences between the position of those with third level education and those without it. While employment for those with third level education has remained stable over the past year, the collapse for all others has been in the range of 10% to 20%. Unemployment has increased for those with third level education, but employment has largely held up. In plain English, it still pays to have a degree. While the pain is being felt all around, the sectoral, occupational and educational data point to the particularly disastrous short-term and long-term effects of the recession on those in manual and service occupations.
In 2008 Tom Boland, the CEO of the HEA, urged young people working in the construction sector, many of whom had left school without a qualification, to think seriously about returning to full-time education. It is now obvious the issue he identified as a problem has come to pass. The jobs in construction have indeed disappeared and are very unlikely to return. Therefore, we need as a matter of urgency to put in place a major scheme to attract and facilitate young people back into full-time education to ensure they have the skills for future employment. That means a lot more than 2,500 places. We are talking about multiples of that number if we are to have a realistic impact on the problem.
Some time ago, Dr. Ronnie O'Toole stated that he believed that the downturn in the construction sector would have a far more negative impact on rural Ireland because in many cases the construction sector was the only major employer in the regions. There is plenty of anecdotal evidence to support this view. For that reason, we must look not only at providing more educational places, but also at putting in some structured form of distance education because one of the major disincentives to taking up full-time education is the cost of renting and living away from home. If we are really serious about getting large numbers of people to go back to full-time education, we should be looking at new and innovative ways of delivering education to the people where they need it rather than delivering the people to the educational system.
Anois, mar achoimre ar an méid adúirt mé, luaigh mé ceist na tuaithe agus ceist an oideachais. Bliain ó shin, mhol Tom Boland ón HEA do dhaoine óga a bhí ag obair sa tionscal tógála agus a d'fhág an scoil gan aon cháilíocht a bheith acu dul ar ais san oideachas go lán-aimseartha. Is cinnte go raibh an ceart aige, mar tá postanna sa tionscal tógála imithe anois. Caithfear scéim a chur ar fáil a mheallfaidh daoine óga ar ais ag an oideachas go lán-aimseartha le go mbeidh na scileanna acu don fhostaíocht amach anseo. Ciallaíonn sin go mbeidh gá le i bhfad níos mó ná 2,500 áit traenála nó oideachais ann dóibh. Ba chóir caint ar i bhfad níos mó d'áiteanna ná sin má táimid chun dul i ngleic leis an fhadhb seo.
Maidir le ceist na tuaithe, is cinnte go raibh áiteanna faoin tuath ag braith i bhfad níos mó ar an tionscal tógála nááiteanna eile. Mar sin, má tá muid chun dul i ngleic le fadhb na dífhostaíochta faoin tuath, caithfimid cinntiú go mbeidh oideachas ar fáil ní amháin sna coláistí ach ar fáil do dhaoine faoin tuath in ionaid sna bailtí gar dóibh - go mbeidh distance education ann dóibh. Ceann de na fadhbanna is mó atá ag na daoine seo ná an costas atá ar tithe a thógaint ar cíos agus a bheith ag maireachtáil i bhfad ón bhaile. Caithfear scéimeanna a chur ar fáil a thabharfaidh deis do dhaoine faoin tuath tabhairt faoin oideachas arís le go mbeidh na scileanna acu don fhostaíocht sa mheántéarma agus san fhadtéarma.
Cuirim fáile roimh an Aire Stáit go dtí an Seanad chun an obair thábhachtach seo a phlé. Molaim Páirtí an Chomhaontais Ghlais as an rún seo a ardú. Tá sé oiriúnach an ábhar a ardú ar an clár mar is ábhar tábhachtach é.
I compliment the Green Party, particularly Senators Dan Boyle and Déirdre de Búrca, on putting forward this motion. It is essential that the Oireachtas, the Government and society generally focus on the issue of unemployment, which is the human downside to the current economic recession. It is shattering for people who have spent their lives working and who are at a stage in life where they have commitments to their families to find themselves without the resources to meet their commitments. Like many others here, I am lucky to have gone through life so far without experiencing the blight of unemployment. In the earlier years of my political life, in the 1970s, I worked at local government level during a period of high unemployment which people found soul-destroying. The problem was even more acute in the 1980s when we had a very high unemployment rate. The effect on the unemployed and their families was devastating.
The Government has been seriously challenged by the rapidity of the global economic downturn and its effects on Ireland. The downturn is multifaceted in that there is a serious fiscal deficit which commands the attention of Government and a banking crisis which could lead to a total collapse of the economy. The economy generally and unemployment specifically need increasing attention while we also try to get to grips with the other areas. As we have learned from past experience, when people become unemployed and are in that position for two or three years, a dependency mentality takes over and people become unemployable. We must be mindful of that.
In that regard, I welcome a number of the initiatives taken by the Government in this area, particularly the improved FÁS employment services. Hopefully, FÁS will measure up to the challenge that confronts it and provide job search assistance and training places. The number of training places has been doubled by the Government. I understand the number of places has been increased to 128,000 under the FÁS training initiatives.
The employer-based redundant apprentice rotation was essential. Many Members would have had representations from people nearing the end of their apprenticeships who were finding it difficult to hold their employment. It was essential that those who had put in a number of years to pursue a career would be given the opportunity to finish that training. The training programmes within the institutes and the employment schemes through which we now provide 400 additional places are an important stopgap measure but they also provide the completion of very worthwhile projects to communities. I know of people who were on such schemes in the past and wished to remain on them when their term finished because it gave them a certain dignity - the dignity that comes from working and earning one's living.
There are also the placement programmes and the employment retention scheme which was recently announced and which is under discussion with the social partners. This is important but it is a complicated area. It is imperative that the application of the scheme, when it is finalised, does not give rise to displacement and that we do not end up creating unfair competition for employers who are struggling at present and who obviously need to operate on a level playing field. That is not to say I am opposed to this scheme. There are merits to it but we need to be very careful in how we implement it and, perhaps more importantly, in how we monitor it, particularly how we monitor any downside effects that might arise from it.
There are other areas to which the Government needs to turn its attention. In that regard, I am glad the Minister of State, Deputy Kelleher, is present because he is familiar with much of this area, particularly the area of employment regulation. Over the years, much has been introduced and perhaps imposed in the area of employment regulation, with much of this coming from social partnership. I would be the first to recognise that we owe much to social partnership. Particularly in the late 1980s when it was established and when we were in serious economic distress, it was very much a forum for assisting the process of coming through that and laying the foundations for a better economy during the 1990s and particularly in this decade, from which we have benefitted.
I ask that areas such as the regulatory authorities be examined. I attended a comhairle ceantair meeting on Monday last. The Minister of State might be interested to know the proprietor of the premises we were in had received a visit from health and safety officials that day. While it is right they are doing their job, he told me it was the first time in 30 years he had been visited by anyone from the Health and Safety Authority, which raises some questions.
The minimum wage will have to be examined. I am of the view that it is an impediment to employment. Generally, wages and salaries in our economy are too high and I understand some economists now advising the Government suggest they are too high by a third. A survey carried out by the University of Glasgow last year also indicated that this is the case. We need to look at this area because if we do not, the downstream effect will be increased unemployment. It is better that people have the dignity of work, even if they are working at a lower rate, than that they are unemployed with a notional figure of a minimum wage which is no longer applicable to them simply because employers can not afford to pay it. We need to be pragmatic in the way we approach this issue.
Social welfare levels are being cited to me as an issue. I know of employers who are prepared to take on staff but they cannot get them because they would only be marginally better off than they were on social welfare. We encountered this issue previously and it needs to be carefully considered because we do not want abuses to arise.
All Government policies in the economic area should be proofed against their effects on employment or unemployment, depending on which way one wants to look at it. This should be the priority in everything we do because the worst possible effect of the economic downturn is unemployment.
I welcome the Minister of State and I welcome the motion. It is only fair to point out that were it not for the fact this side of the House provided two speakers in succession at 6.20 p.m., this debate would have collapsed. This shows what the Government thinks of the unemployed and unemployment in its dealings in this and the other House. While we could have played a cynical game and not provided a second speaker at that time, we did not do so.
I come from Waterford city and am one of those in that city who are becoming despondent with the number of job losses we have witnessed. Only today, Bausch & Lomb, which is still a wonderful company, thank God, has let go another 120 people in addition to those let go earlier this year. Last week, ABB Transformers let go 178 people and, prior to that, our flagship industry, Waterford Crystal, let go over 600 people. What policies has the Government implemented to protect the jobs of the people in these industries, in particular in Waterford Crystal? There was no effort to purchase the brand name and protect manufacturing of this flagship industry in Waterford. There was no effort to protect the showroom which attracted over 300,000 visitors to Waterford and the south east, and which gave so much employment in the tourism area, including in hotels and many other areas of the hospitality industry. Cruise ships came to Waterford but many of them have cancelled since the closure of Waterford Crystal's showroom and the loss of the expertise that people came to see.
This is what is happening in Waterford but the Government is still refusing to upgrade Waterford Institute of Technology to university status, something that all the economic commentators in the region state would be the catalyst to create more jobs within the region. The Government is stumbling from report to report, saying "we will, we won't" in regard to having a university in Waterford. The day before the last general election, a letter from the former Taoiseach was plastered over the local newspapers stating "we will upgrade Waterford Institute of Technology to university status". Where has the promise gone? A new Minister, another report, more disappointment for the people of Waterford and the south-east region and thousands of jobs gone in the meantime - that is the legacy of this Government and the last Government. This Government is probably the worst in the history of the State, although it would be run close by the previous Government, led by the last Taoiseach and the then Minister for Finance, now the Taoiseach.
The limited job proposals that have come out in drip form in the past month are a paltry response to the unemployment we face. We have an economic and unemployment crisis yet we have a response from the Government that might provide some part-time jobs and 2,500 extra places in education. That is typical of the response. Last week, the Minister for Finance said we "now" have a serious situation with unemployment. Today, we have 413,000 people on the dole queues. That is an indictment of the Government and it is absolutely disgraceful. As someone who spent time in the dole queue at one stage I fully understand how each of these people feels at present and it not only affects these people but their families are affected as well. However, the Government seems to be in slumber, waking up like Rip Van Winkle and taking the view that only now is there a crisis. There has been no response.
Fine Gael has advocated measures for more than one year, including proposed job creation and protection packages such as PRSI breaks for new employees. However, there has been no response. This idea would protect in some way some of the employees who have been let go in recent months. We were asked to produce ideas on this side of the House and we have done so, but they were accepted only months afterwards by which time the damage was done, a greater number of people were in the dole queues and more families were hit by unemployment. Some people concerned about educating their children and sending them to college no longer have that option. People are concerned about such issues when they are unemployed. In addition they are concerned about how to pay the mortgage and the loans for the car and whatever else.
I could say a good deal more on the subject because I was unemployed at one time and only one who has been unemployed at some time can understand the depth of feeling of those on the dole, or those who suddenly find out they have no job, such as the Bausch & Lomb workers this morning. It is devastating and such people seem to be treated as a number. However, they are people with feelings, families and commitments, and we should treat them as such and do a great deal more than we are doing at present.
The debate comes at a poignant time given the current economic situation, not only in Ireland but in other parts of the world where jobs are being lost. I agree with some of the sentiments of Senator Cummins regarding those who are losing their jobs and the difficulties that presents to individuals and families, to which I can relate. The same situation is occurring in other parts of the country, including Donegal. In 2001 and 2002 large numbers of jobs were lost in my area. However, up to 800 of the jobs in the Gaoth Domháir industrial estate were regained as a result of direct interventions by Government and State agencies. I believe that Government assistance can help, as I have seen since 2002.
I wish to lay out several points. While the Minister of State is in the House I refer to the issue of people becoming redundant and losing their jobs. Many people seek access to community employment schemes and rural social schemes but are unable to take up those schemes because the numbers are capped. I understand an additional 400 places are now available under the rural social scheme but we must examine a new scheme to get people off the live register and to allow them to work for the community. The net cost to the Exchequer would be minimal and I call on this possibility to be considered.
An issue that causes widespread mayhem to small and medium sized enterprises is banking and the unavailability of access to credit.
We must tackle this issue. I recognise the Minister for Finance is doing his utmost to establish NAMA but many SMEs which apply to the local bank manager are told the decision has been removed from the locality and is made in Dublin. This is not an easy issue with which to deal but if it is not dealt with soon many more SMEs will lay off employees. We must get tough with the banks in that regard, although they are held to ransom to some extent as well.
I am grateful for the opportunity to participate in the debate, some of which I listened to in my office. Many speakers gave their views and no doubt the Minister will have listened to some of these and taken them on board. This was an opportunity to discuss some of the pertinent issues relating to unemployment at present.
There are two immutable rules in politics, one is that the Opposition will invariably seek to portray things as worse than they are and the other is that the Government, however it is composed, will always seek to claim that things are far better than they are. Tonight's debate has contained many such examples. I thank the main Opposition party for its contribution and its provision of five speakers to the debate. Half way through the debate I was concerned that the time allocated would not be used appropriately, which would have been very surprising given the constant requests on the Order of Business for debates of an economic nature. While moving the motion my colleague and I were especially conscious this was an opportunity to address a very serious issue and an opportunity to do so in a way in which we hoped would be consensually based and as collegial as possible. The Government side has contributed seven speakers to the debate, two of whom shared a slot, and the time has been used appropriately.
I refer to the meat of the contributions made today. I am especially thankful for the contribution of Senator Mullen who showed himself to be an Seanadórí neamhspleách by giving a very rounded contribution on the nature of unemployment in the country at present and the particular risks of youth unemployment. He provided appropriate criticisms of Government but also recognised the very difficult economic situation in which we find ourselves. I found the contribution of Senator Norris equally important in the sense that he identified particular areas of concern, which were also identified by other speakers, including the Leas-Chathaoirleach who, when he had an opportunity to speak, referred to particular sectors such as food and tourism. Senator Norris mentioned the arts sector in particular and, although it is a small employer, in the times in which we find ourselves it is very important, for the future and to bring about a new economy, to be creative and to bring about creative thinking.
I thank Senator Cannon for his contribution. He referred to specific items which must be examined in terms of incentives, whether PRSI holidays for employers or job subsidies, or perhaps going so far as to make the jobseeker's benefit or allowance available to prospective employers for a given time because there would be no cost to the State. These are points we need to consider in the serious times in which we find ourselves.
I am also thankful for the contributions made by several of the speakers on the Government side in recognising that we are in a crisis. The contribution of the Minister of State, Deputy Kelleher, was especially important. He referred to the contribution of Senator Twomey which I do not think was as personalised as it may read in the record of the House and I would have agreed with him on some points. However, I am unable to accept the amendment to the motion for the reasons I stated in my earlier contribution and I ask the main Opposition party to consider that.
The Dail Divided:
For the motion: 15 (Paul Bradford, Paddy Burke, Jerry Buttimer, Ciarán Cannon, Paudie Coffey, Paul Coghlan, Maurice Cummins, Paschal Donohoe, Frances Fitzgerald, Dominic Hannigan, Nicky McFadden, Joe O'Reilly, Eugene Regan, Brendan Ryan, Liam Twomey)
Against the motion: 31 (Dan Boyle, Martin Brady, Larry Butler, Peter Callanan, John Carty, Donie Cassidy, Maria Corrigan, Mark Daly, Déirdre de Búrca, Pearse Doherty, John Ellis, Geraldine Feeney, Camillus Glynn, John Gerard Hanafin, Cecilia Keaveney, Terry Leyden, Marc MacSharry, Rónán Mullen, David Norris, Brian Ó Domhnaill, Labhrás Ó Murchú, Francis O'Brien, Denis O'Donovan, Fiona O'Malley, Ned O'Sullivan, Ann Ormonde, Kieran Phelan, Shane Ross, Jim Walsh, Mary White, Diarmuid Wilson)
Tellers: Tá, Senators Ciaran Cannon and Maurice Cummins; Níl, Senators Déirdre de Búrca and Diarmuid Wilson.
Amendment declared lost.