Written answers

Tuesday, 18 February 2014

Department of Finance

Pensions Levy Issues

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent)
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183. To ask the Minister for Finance if he will provide exact details of the amount, in monetary terms, of the €1.452 billion pension levy collected to date that has been used for job initiatives; if he will detail each of these initiatives and indicate exactly the number of full-time, paid jobs which were created as a direct result of these initiatives. [7779/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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A stamp duty levy on pension fund assets was introduced in the Finance (No.2) Act 2011 as a measure to fund the Jobs Initiative.  This was estimated to yield €470 million a year for 4 years. The Revenue Commissioners have advised me that receipts amounted to €463 million in 2011 and €483 million in 2012. This is broadly in line with the amounts anticipated to be collected in those years.  €535 million was collected in 2013, due to an increase in the capital value of pension funds.

The Jobs Initiative announced in 2011 included a range of revenue and expenditure measures to support the protection of existing jobs and the creation of new ones. It provided for the reduction of VAT on tourism services to 9% from 13.5% on a temporary basis until the end of 2013.

The Deputy will be aware that I announced in Budget 2014 the continuation of the 9% VAT rate for the tourism and hospitality sector. The decision to retain the 9% VAT rate for tourism services will help maintain the momentum created by the success of The Gathering last year.  The estimated cost to the Exchequer of this measure is €350 million in a full year and €120 million for 2011 when it was introduced. This gives an estimated cost to the Exchequer of €820 million to end 2013.

A policy paper, published with the November 2012 Medium Term Fiscal Statement, found that the 9% reduced VAT rate appeared to have the desired impact both in terms of price pass through and by contributing to employment gains, with an additional 3,000 jobs in quarter 1 2012 relative to quarter 2 2011 in the labour intensive food and accommodations services sector of the economy. Further to this, the CSO website shows a 13% increase in employment from June 2011 to June 2013 in the food and accommodations services sector.

The Jobs Initiative also included a number of current and capital expenditure measures, including a number aimed at retraining the workforce. While the details of the expenditure on these measures are a matter for my colleague the Minister for Public Expenditure and Reform, Brendan Howlin T.D., I have been advised of the expenditure on a number of measures introduced under the Jobs Initiative.

The JobBridge scheme has exceeded the 5000 places originally set out in the Jobs Initiative programme. Due to demand for places, extra funding was provided to the JobBridge scheme, with funding for a weekly average of 6,740 places in 2014. As of late 2013, the total number of internships taken up under JobBridge, the National Internship Scheme, had passed 20,000. Indecon Economic Consultants undertook an evaluation of the JobBridge scheme in 2012 (published in April 2013) and their report found that 61.4% of the JobBridge survey respondents were in employment within 5 months of finishing their internships.

While the expenditure figures for JobBridge during 2013 have not yet been finalised, the table below indicates the expenditure allocation to this measure under the 2013 Revised Estimates Volume (REV).

 Expenditure Breakdown on JobBridge2012 Provisional Outturn2013 REV2014 REV
 -€000€000€000
National Internship Scheme - JobBridge€54,739€81,760€82,250
 --- -
Numbers on the Scheme (weekly average on scheme)2012 Provisional Outturn2013 REV2014 REV
National Internship Scheme - JobBridge4,4356,5906,740
The numbers represented are the weekly average numbers on the scheme, not the year-end numbers. At year-end 2012, there were 5,532 on the JobBridge scheme and at year-end 2013 there were c. 6,000 on the scheme.

In terms of measures in the education sector, the Springboard scheme as announced in the Jobs Initiative had initially provided for 5,900 places. During 2011 and 2012, over 10,000 people enrolled on programmes under the Springboard scheme.  The scheme was extended further in 2013 with 6,000 places under the third Springboard allocation. Further rollouts of the Springboard scheme have been considered and it is expected that further places will be provided under Springboard 2014. There are also education measures introduced under the headings of Back to Education Initiative and Specific skills training along with funding for Post Leaving Certificate courses. All these measures were aimed at retraining and educating the workforce to improve employability. Overall, in the region of €270 million was spent in the 2011 to 2013 period on education measures.

The Jobs Initiative also contained PRSI measures. These measures have helped improve competitiveness in terms of Labour costs, thereby protecting exists jobs and promoting new employment. It is hard to quantify the true cost of these measures to the Exchequer, but the original estimate of these measures for 2011 to 2013 was in the region of €500 million.

Overall, in the region of €1.7 billion has been spent on measures introduced under the Jobs Initiative from 2011 to 2013. The difference between this expenditure and the amount collected under the pension fund levy has been made up by contributions from the national training fund and from allocations from within existing Departmental expenditure ceilings.

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