Kenny aims to replace jobs lost in recession by 2020
Taoiseach says borrowing can be eliminated, pledges major review of Government spending
The Government has published a post-bailout economic strategy which focuses on ambitious growth levels and a return to the employment figures of the Celtic Tiger years.
The medium-term economic strategy sets out the Government’s policies and forecasts until 2020 and predicts growth rates of above 3 per cent from 2017; a zero general government balance by 2020; and unemployment falling from the present levels of 13.5 per cent to 8 per cent within six years.
The document sets out the ambition of attaining “full employment” by the end of the decade.
Document: A Strategy for Growth
The Government has vowed to make the conditions right to fill all 330,000 jobs lost after the economic crisis hit in 2008 to bring employment levels back up to 2.1 million which were last seen at the height of the boom.
Taoiseach Enda Kenny said 2014 would be the “year for jobs” in Ireland. “Everything that can be done to accelerate the labour market will be done,” he said at the launch of the document in Government Buildings this afternoon.
The 66-page document, entitled a Strategy for Growth, has been in planning for some months and is the Government’s first such strategy for three years that does not have to meet approval from the EU-IMF troika of international lenders.
It was launched by Mr Kenny, Tánaiste Eamon Gilmore, Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin.
They also comprise the membership of the Economic Management Council.
As well as the economic projections, the document sets out what it describes as the over-arching priorities for economic, banking, investment, employment, public expenditure, social welfare policies over the next six years.
Each Government Department will be expected to draw up its own sectoral plan in response to this document, with quarterly, half-yearly and yearly targets all staying within the limits set out.
The Government has promised monitoring of all policy objectives but they will be done by Cabinet sub-committee - not always in public - and not by the quarterly reports that became familiar to the public during the three-year bailout programme.
The document does set out, however, some of the major policy actions that will be required in 2014.
They include a new comprehensive review of expenditure, a white paper on universal health insurance, an assessment of establishing a strategic investment bank; a new strategy for the Irish Financial Services Centre, as well as a new construction sector strategy.
Speaking at the launch, Mr Kenny said the Government’s aim was to halve the rate of unemployment while ensuring the mistakes of the past would not be repeated.
Describing the strategy as a roadmap until 2020, he said all Ministers will have to comply with it. “As Taoiseach, I will make sure the roadmap is implemented,” he said.
“The document shows that employment can grow over the next six years back to the level of the Celtic Tiger, some 2.1 million jobs,” Mr Gilmore said.
Mr Gilmore said the challenge for the Government was to create “real and sustainable jobs” based on an export-led economy unlike those which were created during the construction-led bubble economy of the Celtic Tiger.
Asked if the prediction of 3.5 per cent growth by 2014 was too ambitious, Mr Noonan insisted the estimates were prudent.
He said the Government’s own growth figure for 2014 was 2 per cent, while IBEC this week predicted a 2.8 per cent increase. He said he expected the ESRI forecast tomorrow to also be in the same general area.
According to today's strategy, growth would exceed 3 per cent between 2017 and 2020 - the first time it has forecast out that far - and the Government would cut its debt to 93 per cent of GDP in 2020 from a peak of 124 per cent this year.
Mr Howlin said the indications coming from the Germany, Britain and the US suggested the economic landscape was “benign”.
When it was put to him that the forecasts for reduction in the number of people unemployed was modest in comparison to economic growth, Mr Noonan referred to more jobs being made available but not all of them being filled from the dole queues.
He pointed to increased immigration from Eastern Europe now that the economy was improving, as well as returning emigrants and those leaving school and college taking up work.
The document says the Government will monitor performance of relevant plans and initiatives on an on-going basis including through Cabinet Committees.
Last weekend, Ireland became the first euro zone member to successfully complete a bailout, after three years of monitoring by the European Union and International Monetary Fund.
The Government has turned down a backup credit line with enough debt-market funding to cover costs until 2015.
It is now keen to prove to investors that it will maintain its fiscal prudence, while offering hope to the austerity-weary that the worst is over.
The plan has been met with a mixed response, with the Small Firms Association claiming it is short in detail. Acting director Avine McNally said: “It is vital that Government works with small business to put the right policies in place, as this vital sector will drive growth in the wider economy, more so than any other.
“The small business sector given the right economic conditions will generate the growth needed to create jobs and overcome our debt burden. Small business can lead the way in helping Ireland to recover faster and stronger.”
Trade union Siptu added that the strategy stops short of prescribing specific key actions in many areas. Economist Marie Sherlock said firm efforts need to be made for tackling household debt and job creation. “In that context, the plans to be published by the individual government departments in the New Year will be critical,” Ms Sherlock said