Written answers

Thursday, 26 January 2012

5:00 pm

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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Question 83: To ask the Minister for Finance the likely net impact on the Exchequer balance in 2011, 2012, 2013, 2014 and 2015 of measures announced in the jobs initiative; if an economic assessment of the initiative has been or will be undertaken; and if he will make a statement on the matter. [4718/12]

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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Question 84: To ask the Minister for Finance if he will detail, in tabular form, the amount allocated for the years 2011, 2012, 2013, 2014 and 2015 for each revenue measure announced in the jobs initiative, the revised allocation following any subsequent policy decision; the outturn in 2011 for each measure; and if he will make a statement on the matter. [4719/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 83 and 84 together.

The implementation of a jobs and growth strategy is a key priority of this Government. The Jobs Initiative contains a range of measures aimed at assisting in employment generation – providing opportunities for those who are out of work, to restore public morale and confidence in the economy and encourage spending by consumers.

The Jobs Initiative was designed to be budget-neutral over the four year period 2011 – 2014. However, it is important to note that it was expected to bring in a small net positive amount to the Exchequer in 2011. This is because the yield from the temporary levy on pension funds which was introduced to fund the Jobs Initiative was greater than the estimated cost of the other measures introduced. These included a new 9% VAT rate, the halving of the lower rate of PRSI and small amounts of additional current and capital expenditure. The goal of the Jobs Initiative is not direct economic stimulus but rather a targeting of resources towards more employment-rich areas of activity.

In terms of the specific detail on the full range of expenditure and revenue measures, officials from my own Department and Minister Howlin's worked closely with other Departments in preparing the proposals and assessing the quantitative and qualitative impacts. The estimated yield and costs associated with the various measures introduced are set out in detail in the summary of policy measures section of the Jobs Initiative booklet. A summary of the original measures and associated estimated yield and costs is set out in the table.

2011 (€m)2012 (€m)2013 (€m)2014 (€m)Total
Revenue
*Air Travel Tax-15-90-105-105-315
VAT-120-350-350-60-880
PRSI-95-208-201-33-536
Pension Funds Levy+470+470+470+470+1,880
Expenditure (Additional)-40-30-30-30-130
Net Benefit (+) / Loss (-)+201-208-216+242+19*rounding may affect totals

*It should be noted that the proposed suspension of the Air Travel Tax, at an estimated cost of €15 million in 2011, €90 million in 2012 and €105 million in a full year, was conditional on the airlines increasing passenger numbers in terms of restoring routes and capacity. Following discussions with the airlines in that regard, the Government decided to retain the Air Travel Tax in 2011, pending a further review in the spring.

Also, the outturn for the pension levy in 2011 was €463 million as opposed to the original forecast amount of €470 million.

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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Question 85: To ask the Minister for Finance the number of new jobs created by him as a result of the jobs initiative; and if he will make a statement on the matter. [4730/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The labour market is still in a weak state, as confirmed by the latest CSO Quarterly National Household Survey data. The unemployment rate is unacceptably high and people are still losing jobs. At the same time, some jobs are being created though it is difficult to assess the number as official employment data are presented in net terms and information on gross flows into and out of employment is not available. Some information can be gleaned from the live register however. This shows that 144,000 left the live register to take up employment last year.

I am confident that the measures introduced by the Government in May 2011, such as reducing the rate of VAT in the high value added tourism sector, have played a role in this respect. This view is shared by my colleague, the Minister for Enterprise, Jobs and Innovation, who only yesterday informed the House that a significant number of jobs were created in the tourism sector on foot of measures set out in the Jobs Initiative.

The Government recognises that improving labour market conditions represents its biggest challenge, and, accordingly, is giving priority to job protection, job creation and supporting the unemployed. In this regard, the Minister for Enterprise, Jobs and Innovation will soon publish an Action Plan on Jobs.

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