Ibec says jobs growth exceeds expectations in first half of year
Business group lobbies Noonan not to increase excise, VAT or PRSI
Fergal O’Brien of Ibec: “We simply cannot afford to take more money out of the domestic economy.” Photograph: Eric Luke
Employment growth exceeded expectations in the first half of 2013, according to a new jobs report by employers’ group Ibec.
It says there were 8,259 new jobs announced in the past six months – with more than 2,100 announced in September – leading to an annual increase of 31 per cent. Private sector employment increased by 1.8 per cent over the past year, the report states.
The fastest employment growth was in agriculture, forestry and fishing, up 18.6 per cent, followed by the accommodation and food service activities sectors, up 8 per cent.
According to the report, the overall manufacturing sector provided 33 per cent of all new jobs announced.
However there remains a problem with long-term unemployment, which fell 12.3 per cent on an annual basis, but remains at nearly 60 per cent of total unemployment.
The business group is lobbying Minister for Finance Michael Noonan ahead of next week’s budget, imploring him not to increase excise, VAT or PRSI.
Its head of policy and chief economist Fergal O’Brien said: “The jobs recovery has been better than most expected, but unemployment remains at crisis level.
“Any excise, VAT or PRSI increase will directly hit the number of new jobs next year.
“We simply cannot afford to take more money out of the domestic economy.”
He said Irish excise rates were already among the highest in Europe and warned that any increase could potentially reignite cross-Border shopping.
“There is increasing evidence that further tax increases are likely to result in less revenue for the State, not more.
Last year’s significant excise increase has not delivered the anticipated return.
“The Government has said the budget will be pro-growth and pro-jobs, but increasing indirect taxes like excise would damage employment in the drinks and hospitality sectors,” Mr O’Brien said.
A reversal of the 9 per cent VAT rate to 13.5 per cent would cost 10,000 jobs in the economy and undo much of the employment recovery seen in that sector over the past year, he claimed.