Niall Collins (Limerick, Fianna Fail)
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Question 41: To ask the Minister for Finance if any assessment has been carried out by him on the effectiveness of the measures in the jobs initiative which came into effect on 1 July 2011; if there is any specific evidence of new jobs being created as a direct result of the initiative; his views whether the initiative is having a net positive impact on the Exchequer; if he intends to retain all of the measures in full for 2012; and if he will make a statement on the matter. [34396/11]

Michael Noonan (Limerick City, Fine Gael)
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The Jobs Initiative is designed to support a return to economic growth and strengthen its foundations. It is about focusing our now more limited resources on measures that offer the greatest potential for expansion and employment creation in the domestic economy. The aim is to target key sectors of the economy that can assist in getting people back to work, providing opportunities for those who have lost their jobs to re-skill and building confidence in order to encourage consumer activity. It is of course extremely difficult to separate out the increase in economic activity that is attributable to specific initiatives, particularly as the QNHS employment data only shows gross sectoral flows. Nonetheless, the Jobs Initiative is an important part of the Government's overall strategy to establish the correct conditions to allow our economy to recover, while at the same time respecting the requirement to return our public finances to a sustainable position. It should be viewed as one element of a wider strategy to support economic activity.

Given our commitments under the EU/IMF Programme of Financial Support, and our current public finance difficulties, the Jobs Initiative is budgetary neutral over the period to 2014 and is being funded through the introduction of a temporary levy on pension funds.

The measures introduced as part of the Jobs Initiative are expected to result in a net gain for the Exchequer in 2011. This is because the yield from the temporary levy on pension funds is expected to more than offset the estimated cost of the other measures introduced. These included the new temporary second reduced rate of VAT of 9%, aimed primarily at the tourism sector, the halving of the lower rate of employer's PRSI and the small additional amounts of current and capital expenditure.

In 2012, a net loss of revenue to the Exchequer is expected as the full year cost of the measures introduced is estimated to be greater than the forecast yield from the temporary levy on pension funds.