Jobless rate expected to reach 9.25% this year

 

THE AVERAGE unemployment rate for 2009 could be as high as 9.25 per cent, officials from the Department of Finance have informed employers' and union representatives in the social partnership process. This compares with an estimate last November of 7.8 per cent.

The Government is briefing the social partners that tax revenues are expected to come in at €37 billion this year, compared with the €42.78 billion forecast for 2009 in the budget last October.

Gross domestic product (GDP), which measures the value of all the goods and services produced in the State, is forecast to decline by 4 per cent in 2009. Gross National Product, which also includes profits earned by multi-nationals, is forecast to fall by 4.5 per cent. Further declines are forecast for 2010.

The Department of Finance is forecasting that the likely budget deficit in 2009 will be €11 billion, compared with €8.1 billion last year. This means that 20 per cent of gross current spending will be borrowed by the State.

At Government Buildings in advance of yesterday's meeting with representatives of employers' organisation Ibec, Taoiseach Brian Cowen said: "I think it's very important, given the scale of the difficulties facing the country in the aftermath of the publication of the end-of-year exchequer figures last Monday, to sit down with the social partners now, as I said I would during the course of this month, when the Dáil is not sitting.

"It is an opportunity for the Government to engage very intensively with social partners, first of all to set out, so that everyone understands and recognises the scale of the challenge that faces us, to listen to inputs that they would have as to how we might work together to deal with them and to get on with making those decisions.

"I think that that's the best way to proceed, given the scale of the challenges we have," Mr Cowen said. "It has served us well in the past, I believe that it can serve us well in the future."

The Taoiseach was accompanied by Green Party leader and Minister for the Environment John Gormley, who told journalists: "You can look upon the current recession as a crisis but I see it as an opportunity to go into the whole area of green technology.

"What we want to do in our discussions in relation to social partnership now is to add a new dimension and that dimension is the environmental and sustainability pillar and I've been working very hard in my own department to ensure that the NGOs in this sector are properly financed, and we have tripled their funding," he said.

On his way into the meeting, Ibec director general Turlough O'Sullivan said there should be staff cutbacks in the public sector on a level comparable with the private sector.

"I don't want to necessarily prejudice the talks that will take place between the Government and the public service unions, but if you look at what's happening across industry, you're looking at reductions of between 10 and 20 per cent and I don't see why the public sector shouldn't reflect what's happening in the real world," Mr O'Sullivan said.

Asked if Ibec would be seeking pay cuts in the public sector, he replied: "How the  Government address their costs is really for them.

"Our view is quite simply this, that the Government's costs are now based on income that was four to five billion more than it is at the moment, so just like you and I would have to do, they are going to have to cut their expenditure to live on the income that they have, from now on."

The Government is scheduled to meet the Irish Congress of Trade Unions today.