Niall Collins (Limerick County, Fianna Fail)
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333. To ask the Minister for Jobs, Enterprise and Innovation her views on the employment and unemployment projections in the ESRI report, Modelling the Medium to Long Term Potential Macroeconomic Impact of Brexit on Ireland; if Enterprise 2025 will be revised as a result of these revised projections; and if she will make a statement on the matter. [34327/16]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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Enterprise 2025, the Government’s long-term enterprise policy is an ambitious strategy, with the objective of delivering growth over the next decade that is sustainable. The objective is to achieve strong export performance that is underpinned by innovation, productivity, cost effectiveness and competitiveness. We aim to diversify our export markets beyond the UK and to broaden our geographic source markets for FDI. We aim to build resilience into our economy so that we can better respond to external drivers of change over which we have no direct control.

The Enterprise 2025 ambition was set in the context of the macro-economic forecasts contained in the Short-term Economic and Fiscal Outlook for the period 2014-2021 prepared by the Department of Finance. The Programme for Partnership Government affirms the ambition for the creation of 200,000 more jobs over the period 2016 to 2020.

Given our close economic ties any negative development in the UK economy in the medium term could have potential implications for the Irish economy. The ESRI analysis helps to model and quantify these impacts, despite how unprecedented Brexit is. It is important to recall that the ESRI analysis is based on a presumption of policy neutrality – that the government does not implement any policy changes in response to Brexit in the coming years. This of course is not the case. The Government and my Department have already started to implement changes with Budget 2017. Once the UK's exit negotiations are clearer, other financial measures may be added to counteract unknown consequences.

Achieving the policy objective of building economic resilience as set out in Enterprise 2025 remains a priority. The UK vote does mean, however, that we need to redouble our efforts to work with our Irish owned enterprises to manage through the uncertainty, and with the FDI sector to capture opportunities for new investment.

We are taking action. I have secured the largest ever capital budget at €555 million for my Department for 2017. I have secured sanction for 50 additional staff across the agencies that will be deployed both at home and overseas to meet the challenges presented by Brexit. While accepting that new challenges exist, we remain ambitious and I have agreed targets with IDA and Enterprise Ireland to bring employment in each of their portfolios to over 200,000 next year.

I have established a Brexit Coordination Group within the Department where my senior officials and agency CEOs meet regularly to work through what needs to be done ‘on-the-ground’ to anticipate and respond to what is as yet an unknown outcome in terms of economic impact. We have increased our trade mission activity and engagement with potential investors in FDI and with our Irish owned enterprises to support them in market diversification, planning their next steps, competitiveness and innovation.

In addition in Budget 2017, the Minister for Finance introduced a number of measures to help get Ireland Brexit ready including: the retention of the 9 per cent VAT rate; the extension of the Foreign Earnings Deduction and of SARP until 2020; an increase to the earned income tax credit for the self-employed; as well as the establishment of a rainy day fund. The appropriate fiscal policies that are now in place will help us to adjust to the economic effects of the UK's negotiated withdrawal from the EU.

Just as the whole of Government responded to the severe unemployment challenge we faced post the global economic downturn, we will respond to the challenges that Brexit presents.