Thank you Cathaoirleach. I want to make it clear at the outset that job creation in this country is at the top of this Government’s agenda. It is the driving force behind so much of our work in stabilising our public finances and getting our banking system working again. It is the reason why, in a time of significant current budget deficit, we are continuing to invest so heavily in our capital programme, in building necessary infrastructure and investing so much in enterprise, research and development.
The challenge of the Live Register figures is one that this Government is working hard to overcome. We are conscious that people across the country want to know that we are taking the action necessary to ensure that Ireland is best positioned when this period of economic turmoil comes to an end. Indeed, if we have been remiss in relation to anything, then it is in terms of getting the message out to the public about what we are doing.
While I will elaborate on a number of these points, I want at the outset, to set out for the record, just a portion of some of the work that the Tánaiste has undertaken as Minister for Enterprise, Trade and Employment, together with myself and Ministers Calleary and Lenihan over the period to date. The initiatives taken include, among others:
* creation through research and development and the development of intellectual property assets in Ireland; introducing the Employment Subsidy Scheme to help retain jobs in our vulnerable exporting companies;
* introducing the Enterprise Stabilisation Fund to help protect jobs in our exporting companies hit by current difficulties;
* mandating comprehensive strategy reviews in each of IDA Ireland, Enterprise Ireland and Shannon Development;
* putting in place a Code of Conduct for Business Lending to SMEs enacted, so that our SMEs know where they stand in relation to the banks;
* establishing a Credit Supply Clearing Group established to tackle the credit supply issue, establish the facts and take on the spin and the myths;
* work ongoing on a proposal to Government for the establishment of a targeted loan guarantee scheme;
* successful introduction of a commitment by central government to pay its debts to business within 15 rather than 30 days;
* a revamp of our public procurement policy to ensure greater SME access to public contracts;
* introduction of two separate Companies Law Acts, the first to toughen our company law regime against potential abuse, the second to ensure Ireland is best positioned to maximise the attraction of job creating foreign direct investment;
* achieving the introduction of new tax changes to support job
* securing the introduction of a PRSI exemption for employers creating new jobs this year;
* targeting enterprise funding and resources at new areas for job growth, such as the green enterprise sector;
* despite the financial situation, prioritising and investing significant capital monies in research and development, science, technology and innovation for future job growth;
* rolling out a new marketing campaign to encourage investment in Ireland from our FDI target markets (Ireland – the Innovation Island);
* putting in place an unprecedented level of training and activation measures to assist those seeking employment;
* introducing new and innovative programmes established to keep people in jobs deemed vulnerable and to get graduates work experience;
* opening up training and activation opportunities to private and voluntary sector providers through the €20 million Labour Market Activation Fund;
* new types of FÁS courses to train and re-train people for jobs in new sectors, such as the green economy;
* increasing the number of places available on Community Employment Schemes; and
* successful application for European Globalisation Fund funding for former DELL employees, two other applications in progress.
I am confident that the Government is pursuing the correct policies that will enable this economy to once again to return to growth and, more importantly, employment creation.
Creating New Employment
Ireland as a small, open economy is especially reliant on foreign trade and we are focussed on ensuring that we can take advantage of the upturn in international growth and trade. Encouraging and positive trends are now visible. In recent months, international organisations such as the IMF and OECD have upgraded their economic forecasts.
In its most recent update in January, the IMF forecast that global economic growth would expand by 4% in 2010 and in 2011. This represented a substantial upward revision from their previous forecast which was published in October.
Established trading partners such as the UK, the Euro area and the United States are all expected to experience growth in the medium term, representing renewed opportunities for our exporters. Similarly, Irish exporters are making inroads into less familiar emerging markets whose growth remains buoyant.
Over the past eighteen months, Irish exports have performed extremely well in comparison with international counterparts. Our goal is to maintain and enhance the policy environment that has facilitated this resilient performance and that will drive future export growth. We estimate that every job in Ireland associated with exporting sustains another job in the domestic economy.
Job Creation
IDA Ireland
International investment will continue to be a key driver of employment, exports and growth.
We will continue to market the Ireland brand as a location of choice for the newcomer and for existing investors. In September, the Tánaiste launched IDA's new innovation focussed overseas market campaign, designed to position Ireland as the pre-eminent location for companies who are seeking to invest in future innovation.
During 2009, we won a total of 125 foreign direct investments. Almost 70% of these investments were from existing IDA clients who are making further investments in this country and reinforcing Ireland’s reputation as a key strategic global business hub.
In these turbulent economic times, it is extremely significant that many of the world’s leading companies continue to invest in Ireland in a wide array of activities including high end manufacturing, global services and Research, Development & Innovation. In absolute numbers, Ireland is moving up the global rankings in relation to employment in R&D, having risen from 19th to 11th in the latest “Global Location Trends” Survey – which is a testament to the SSTI strategy being pursued.
During 2010, IDA Ireland will continue its work to capitalise on our quality workforce, our creativity, our international attitude to business, attractive incentives for R&D and our favourable tax climate to attract multinationals to set up a base in Ireland as a launch pad for markets in Europe, Africa and the Middle East.
Already in 2010, there have been 7 IDA supported announcements in Dublin, Galway and Tullamore and there will be a further significant announcement for the northeast this week.
We are also working to develop the opportunities for Ireland to become a key European hub for the international funds industry. In this regard, I look forward to the proposed changes in the Finance Bill to strengthen Ireland’s competitive edge.
IDA new strategy
The Tánaiste has also tasked the IDA with developing a new strategy for the future direction of Foreign Direct Investment and it will be published shortly. It will include specific initiatives which IDA will be undertaking to retain existing and secure new Foreign Direct Investment. This strategy will identify the opportunities in Foreign Direct Investment international competitiveness so that we maximise our potential to attract markets, while stressing the importance of restoring our relative Foreign Direct Investment.
Enterprise Ireland
Enterprise Ireland delivers a wide range of supports to Irish companies, targeted at the specific requirements of clients throughout all regions to ensure that they develop to their full potential in terms of innovation and exports, which in turn, stimulates job creation.
Enterprise Ireland, in recognising the significant changes in the current economy both in Ireland and globally, has prepared a recovery strategy to identify the actions that will be undertaken to help clients. The agency has refocused its efforts on strengthening and sustaining companies of strategic importance through a range of initiatives focused on the needs of its client base.
County and City Enterprise Boards
The County and City Enterprise Boards continue to provide support
for small businesses in the start-up and expansion phases. Job creation is an inherent consideration in the activities of the Boards.
In 2010, the County and City Enterprise Boards will continue to assist micro-enterprises throughout the country by both direct grant aid to businesses and project promoters and also through the provision of a range of other important business supports such as mentoring, business training and business advice designed to help to stimulate indigenous enterprise creation and to boost employment creation.
The Smart Economy, Science Foundation Ireland and R&D
The development of the “smart” or innovation-based economy is the key challenge facing Ireland as we lay the ground for economic recovery. We are well aware that our enterprise and investment landscape must continually transform itself to stay competitive. Today, the model we strive for, as the basis of our economic renewal, is the Smart Economy, built on the dual strengths of our innovation and entrepreneurship.
The Government has made a major commitment, through the substantial public investment in the Strategy for Science, Technology & Innovation (SSTI) 2006-2013 to making such a transition to the smart economy. This whole-of-Government Strategy comprehends research, and the application and commercialisation of the fruits of that research, spread across six Government Departments.
In December 2008, the Government reinforced the importance of the investment in the SSTI through the paper “Building Ireland’s Smart Economy - A Framework for Sustainable Economic Renewal”, which prioritised continued investment in science and engineering infrastructure and research. For us, Building a Smart Economy is about the development and application of human capital - the knowledge, skills and creativity of people - and our ability and effectiveness in translating ideas into valuable processes, products and services.
In this context, Science Foundation Ireland is playing a critical role in building our competitive academic research base while maintaining a strong focus on excellent research. This work has been highly rewarding as today Science Foundation Ireland funded researchers are connected to over 300 companies in Ireland who support the employment of 56,000 people.
The objective of the R&D programmes administered by our state agencies is to harness the benefits of research collaboration for the benefit of the Irish economy. This entails building up a strong cadre of indigenous firms and attracting and further embedding leading multi-national companies here. This is the essence of the Government’s strategy for STI and it is proving to be the engine of economic growth. At this time of scarce economic resources, the Government has allocated €600 million to STI Departments and agencies in 2010. We are confident that the net gain from such sustained investment will be more and better jobs.
If we look back over progress made in recent years, it is clear investment in the higher education sector is now having a significant impact in terms of Ireland’s human capital development, feeding through to the attraction of foreign direct investment and commercialisation. For example, last year 49% of the IDA’s Foreign Direct Investment wins were Research, Development and Innovation related which were valued at €500m and are built upon initial investments made through Science Foundation Ireland and the Higher Education Authority.
We are working to encourage indigenous enterprises to prosper. Evaluations of State support for R&D show that R&D performing companies have higher rates of growth in turnover, exports and employment and much higher productivity and export intensity than low R&D performing companies.
New High Potential Start-Ups will make a substantial contribution to export and job growth. In 2009, Enterprise Ireland supported 73 such companies across a range of knowledge-intensive sectors, including life sciences, biotechnology, medical devices and telecommunications, and a number of specific niche areas, such as compliance and risk management. These companies are expected to create significant numbers of new jobs over the next three years demonstrating that entrepreneurs across the country are capable of creating high value, export-focused businesses which support employment.
Only by implementing these policies and by targeting our limited resources, can we hope to position Ireland as a competitive, innovative location in which to do business, to grow business, to grow employment and create prosperity.
Supporting Enterprises and Safeguarding Jobs
Ensuring that our enterprises receive the support to assist them through the current difficult period is key to safeguarding employment. That is why the Government has introduced a broad range of enterprise support measures.
Last year, the Government introduced the Enterprise Stabilisation Fund. This Fund aims to support viable but vulnerable companies experiencing difficulties because of the current economic climate. Companies receive funding, which will go to support a range of activities including market development, productivity improvements and product development. In 2009, €58m was spent on 181 projects, supporting approximately 7,500 jobs. The Fund continues to attract a high volume of applications in 2010.
My colleagues and I are also keen to support SMEs and I am particularly aware that there is difficulty for some businesses in accessing credit. To address this issue, the Minister for Finance announced a new Credit Review System in his Budget 2010 speech. The Credit Review System will examine the credit policies and practices of the banks, particularly for SMEs. This new system will inform Government as to what further action might be necessary to secure the flow of credit to Irish enterprise and, through publication of the analysis from the review process, help ensure that the performance of the banks participating in NAMA is transparent to all.
An additional measure to support enterprises in retaining their employees was the Employment Subsidy Scheme which was introduced last year. Between 2009 and this year, we are investing a total of €135 million in this scheme. Under this Scheme, enterprises receive a subsidy of up to €9,100 for each subsidised job.
There have been two calls under the Employment Subsidy Scheme. Applications for the Second Call are still being assessed and it is expected that between the two calls approximately 80,000 jobs will be either directly or indirectly supported.
The Enterprise Stabilisation Fund and the Employment Subsidy Scheme reflect the Government’s commitment and determination in assisting companies overcome this difficult period. Between these two schemes we are investing €235 million directly into enterprises and safeguarding thousands of jobs and securing our enterprise capability in the process.
Employer Jobs (PRSI) Incentive Scheme
The Government is also encouraging employers to create new jobs through reducing the costs associated with employment. Under the Employer Jobs (PRSI) Incentive Scheme, where an employer creates a new job and takes on a person who has been unemployed for 6 months or more, the employer will be fully exempted from the liability to pay PRSI for the first year of that employment. This will give employers an 8%-10% saving on employment costs for each new job created. It will actively encourage the creation of new employment now when it is most needed.
The PRSI exemption for employers creating new jobs this year is in addition to the maintenance of the substantial capital investment programme across Government. Included in this, is the National Development Programme and the implementation of key Government
programmes such as the €425 million Rural Development Programme 2007-13, which is creating some 12,000 jobs, and the €1 million invested each week in the Home Energy Savings Scheme, providing work for some 3,690 registered contractors.
The Government is also investing substantially in the provision of key infrastructure, such as broadband, where the number of subscribers has doubled during the lifetime of this Government and electricity generation from local renewable sources, where at 15% we have already met our target for 2010.
Upskilling the Unemployed
As I said at the outset, the Government remains fully committed to upskilling the unemployed so that they are successful in getting back into employment.
My colleagues and I are proactively leading the Government’s response to Ireland’s unemployment level and driving implementation of the Framework for Sustainable Economic Renewal. The Cabinet Sub Committee on Economic Renewal is also ensuring a coordinated approach across Government Departments in response to the rising numbers of the unemployed.
This approach has included a substantial increase in the number of job search, training and work experience places available to unemployed people.
Prioritisation of Cohorts for Support
We are also focussing our resources on a number of key cohorts of the unemployed which include:
* The lower skilled
* The long term unemployed
* Those under 35 years of age and
* Those formerly employed in the manufacturing, construction and retail sectors.
These cohorts have been prioritised as they are most likely to drift into very long-term unemployment.
The Government is investing substantial resources in tackling our unemployment problem. For instance, through my own Department we will, this year, invest over €1 billion in the provision of a range of labour force measures.
Job Search Supports
As regards jobsearch supports, in 2009, FÁS employment services together with the Local Employment Services doubled their capacity. This means that the annual referral capacity under the National Employment Action Plan rose from 78,000 persons in 2008 to 147,000 persons last year.
Training measures that have been introduced
The additional resources allocated by the Government to tackling the rising unemployment rate have also enabled my Department to significantly expand its activation training and work experience places.
This year, the total number of training and work experience activation places funded by my Department will be approximately 147,000. This compares to the 66,000 places that were delivered in 2008 and the 130,000 places delivered last year.
The bulk of this additional provision has been due to the increase in training places on short courses for the unemployed. FÁS now provides modular based training so that participants can pick which modules they most require to improve their skills and ultimately increase their employability, whilst maintaining a close link to the labour market.
In addition, training courses are being delivered in innovative formats such as online, blended learning and night courses. In this way we are providing a range of delivery methods in addition to the traditional classroom approach, which enables more people access the services of FÁS.
I would also like to take this opportunity to inform the House that, in addition to the places I have just mentioned, Skillnets and FÁS will this year now be providing almost 10,400 training places for the unemployed or those on short time working.
Due to the economic downturn, there are now many individuals who are working for two or three days each week and receiving social welfare payments for the days they are not working. Both Skillnets and FÁS are providing training opportunities for those in this situation. Individuals participating on these programmes can avail of training for the days they are not working while retaining their social welfare entitlements subject to the normal social welfare rules applying. This means that these individuals will now be able to use their reduced working week as an opportunity to upskill themselves thereby improving their employability.
Tackling Youth Unemployment
The Government is acutely aware of the large numbers of people under 25 and who are now unemployed. That is why the Government has decided that this cohort will receive priority access to the State’s supports for the unemployed such as the FÁS employment and training services. The Tánaiste has also asked FÁS to make significant prioritisation of services for the under 25s a key element in their provision in 2010.
An initiative has also been put in place to immediately activate 18/19 year olds, instead of waiting the usual 3 months for this automatic activation.
The main specific provision for early school leavers continues to be training at Community Training Centres and Vocational Education Committees under the Youthreach Programme. The Government is maintaining the 6,000 places available in this programme at a cost of approximately €110 million.
Another important initiative, which would be of particular relevance to this group, is the Work Placement Programme which has 2,000 places, of which 1,000 are for graduates. Participants on the programme gain work experience for a period of up to nine months and may retain their social welfare entitlements subject to the normal Social Welfare rules applying. This work experience will significantly improve their chances of securing paid employment in the future.
Support for Redundant Apprentices
As regards support for redundant apprentices, the Government has implemented a variety of measures, which will support around 4,000 redundant apprentices to progress their apprenticeships.
I want to thank you again for affording me the opportunity to outline the wide and varied spectrum of measures the Government is taking to cultivate the growth of employment in our economy.