Written answers

Tuesday, 5 July 2011

9:00 pm

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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Question 160: To ask the Minister for Finance his estimate of both the rate and number of unemployed by the end of 2011; his estimate of the rate of emigration in the State by end of 2011; the number of additional jobs that the jobs initiative will deliver by the end of 2011; and the cost of each of these jobs. [14718/11]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The latest Quarterly National Household Survey data revealed that in seasonally adjusted terms there were 296,000 people unemployed in the first quarter of 2011, resulting in an unemployment rate of 14 per cent. The data also highlighted the volatile nature of quarterly Irish economic data. Reflecting this, my Department's labour market forecasts are based on annual averages rather than quarterly figures. On this basis, my Department currently anticipates that the unemployment rate will average 14.4 per cent in 2011, while the number of unemployed will average 305,000. Underpinning this forecast is an assumption that there will be net outward migration of around 45,000 during the year. These forecasts were set out in the Irish Stability Programme Update which was published at the end of April. Subsequently, the Central Statistics Office has revised down unemployment rates at the start of the year, and as a result the risks to the above forecasts are on the downside. My Department will continue to analyse the situation in light of later data and will produce revised economic forecasts prior to the Budget in the Pre-Budget Outlook.

There is no doubt that the labour market remains weak. This was highlighted once again by last week's live register data which revealed that there were almost 460,000 people signing on in June. As is widely recognised, there is a significant difference between those signing on the live register and those classified as unemployed under the Quarterly National Household Survey. The Central Statistics Office note that the former is not designed to measure unemployment, however, as it includes part time workers, seasonal and casual workers. Recovery in the labour market typically lags recovery in economic growth, as firms adopt a wait and see approach and achieve higher levels of output by using existing resources more productively. As a result, net employment is expected to decline once again this year - albeit at a much slower pace than in previous years – before starting to expand once again in 2012.

The measures announced in the Jobs Initiative represent the government's first steps to increase competitiveness in important sectors of the economy and improve the functioning of our labour market. In the high value added tourism sector, for example, the introduction of a new temporary second reduced rate of VAT and reduction of the air travel tax to zero will have a positive effect on both costs and sentiment. Accordingly, while it is very difficult to quantify the exact number of jobs that the Initiative will deliver by the end of the year, the measures will play a role in sustaining and generating employment throughout the economy.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Question 161: To ask the Minister for Finance if he will give an assurance that the proceeds from the sale of State assets will be used to fund job creation measures. [14635/11]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The Programme for Government provides for the sale of non-strategic assets up to a value of €2 billion to fund investment in key networks of the economy. This will occur when market conditions are right and when adequate regulatory structures have been established to protect consumer interests. Following publication of the Report of the Review Group on State Assets and Liabilities in April, my colleague the Minister for Public Expenditure and Reform asked Departments to give their considered views on the Review Group's recommendations. I understand that Minister Howlin's Department is considering these views and will bring proposals to Government shortly on the matter. Under the EU/IMF Programme, the Government has agreed to discuss its plans with the European Commission, the IMF and the ECB when it has finalised its response to the Review. This is to take place by the end of the year.

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