A DOUBLING in unemployment over the past year to 388,600 has triggered renewed Opposition attacks on the Government.
But in response to the heavy criticism Taoiseach Brian Cowen strongly defended the Coalition’s record. He told the Dáil that the employment situation would not improve until fiscal probity had been achieved. “We must take the necessary decisions now. We learned the lesson that deferring difficult decisions on public finance merely prolongs the problem.”
Mr Cowen said that over the past 12 months, through changes in income tax and expenditure, the Government had taken approximately €8 billion out of the emerging deficit but every one of those policies had been opposed by the Opposition.
“There is not an easy way through this . . . The prerequisite for economic recovery is to get our public finances in order and that means making cuts in spending and raising taxes,” said the Taoiseach.
Fine Gael enterprise spokesman Leo Varadkar described the unemployment figures as alarming, saying that Ireland now had the second highest unemployment in the euro zone and half-a-million people would be on the dole by Christmas.
“Small and medium enterprises [SMEs] currently employ 800,000 people and represent 97 per cent of Irish companies, which makes the SME sector Ireland’s biggest employer. However, many of these enterprises are losing business as consumer demand falls and are shedding jobs as a result. To date, the Government has done almost nothing to support business even though this is the most effective way to sustain jobs,” he said.
Mr Varadkar said he had been calling on the Government to introduce a package of measures to support small businesses, including a State-backed loan guarantee for SMEs, as has been done in the UK, a reduction in the VAT rates, the abolition of the travel tax, a PRSI exemption for companies taking on employees and a freezing of local authority rates and charges to business. “The absence of job incentives from the Government means there is an absence of hope . . . Any path to recovery must involve incentives to protect jobs and create new ones,” he said.
Labour Party spokesman on Enterprise and Employment Willie Penrose said there was no plan of action and no willingness to engage with a process of tackling joblessness.
“The increase of 188,850 since April 2008 makes this the biggest year-on-year increase ever recorded. With every job lost costing the exchequer €20,000 through extra social welfare payments and tax lost, it is clear that we will never get our national finances in order until we stem the jobs haemorrhage.
“The cost to the exchequer of the increase in the live register over the last year alone amounts to almost €3.8 billion,” said Mr Penrose.
He said Labour believed that it made more sense to put money into saving jobs, creating jobs and providing training and educational opportunities rather than paying people to go on the dole. “Earlier this month the Labour Party published a policy document putting forward positive, constructive proposals which tackle unemployment. For example, the back-to-education allowance and the back-to-work enterprise allowance should be reformed to ensure that jobseekers can avail of these supports within three or four months of losing their job.”
Mr Penrose added that an “earn and learn”, scheme to enable people to acquire new skills and qualifications on days they were not working was also required.
Sinn Féin finance spokesman Arthur Morgan accused the Government of a “head in the sand” approach to unemployment. “The Government is ignoring the unemployment crisis. Unless there is a shift in the Government’s priority away from bailing out the banks and on to saving jobs and creating employment, Ireland will suffer the worst economic depression in modern history.”