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Dublin: 12 °C Friday 18 April, 2014

TheJournal.ie’s progress report for the Government: Jobs

The unemployment crisis has been one of the biggest issues facing the government. One year in, what has it achieved on the jobs front?

Minister for Jobs, Enterprise and Innovation Richard Bruton
Minister for Jobs, Enterprise and Innovation Richard Bruton
Image: Laura Hutton/Photocall Ireland

1) WHAT THEY SAID DURING THE 2011 ELECTION CAMPAIGN

  • Fine Gael said it would ‘keep direct taxes competitive’ including commitments not to raise income tax and to restructure VAT.
  • It promised to investigate a ‘Single Business Tax’ for startups with turnover under a certain amount, abolishing PRSI and corporation tax with a single payment. It also pledged a partial loan-guarantee scheme to help stimulate enterprise.
  • FG promised a ‘Payment and Entitlements Service’ which would not only encourage people to get back to work, but incorporate a ‘welfare to work’ scheme which would see under-25s keep a ‘jobs diary’ while docking benefits from those who turn down work.
  • The NewERA plan would see €7bn invested in energy, communications and water to try and build a ‘world-class infrastructure’
  • Labour’s manifesto focussed on job creation in agriculture and tourism, with the former being boosted by pledges to develop new brands for Irish food, including local brands and a new national ‘eco brand’
  • Elsewhere it promised to appoint a ‘trade czar’ who would co-ordinate government action across departments, and encourage Ireland to target new markets in emerging economies
  • It also pledged a €500m ‘jobs fund’ to grow employment in sectors where Ireland

2) WHAT THEY PROMISED IN THE PROGRAMME FOR GOVERNMENT

A pledge to create a Jobs Fund within the first 100 days of Government, which would:

  • Provide resources for an additional 15,000 places in training, work experience and educational opportunities for those who are out of work
  • Cut the 13.5 per cent rate of VAT to 12 per cent up to end 2013
  • Halve the lower 8.5 per cent rate of PRSI up to end 2013 on jobs paying up to €356 per week
  • Reverse the cut in the minimum wage
  • Abolish the travel tax as part of a deal with airlines to restore lost routes
  • Initiate a long-term strategy to develop new markets in emerging economies
  • An Export Trade Council would be established to strengthen co-operation between state agencies and departments, with a ‘Source Ireland’ portal developed to market services abroad
  • Secure additional resources for the national housing energy retrofitting plan, as part of  plans to phase out subsidies in this area by 2014
  • Expand eligibility for the back to education allowance
  • Accelerate capital works that are ‘shovel ready’ and labour intensive including schools  and secondary roads
  • A national apprenticeship programme, work placement schemes and further education would provide a combined 60,000 places
  • FÁS would be replaced with a national employment and entitlements service providing a ‘one stop shop’ for people seeking their benefit entitlements while also seeking jobs or labour activation

3) PROGRESS – OR LACK THEREOF – IN FIRST YEAR OF GOVERNMENT

  • The minimum wage was restored to €8.65 per hour from 1 January 2011
  • The rate of PRSI for employees who earn less than €356 per week was lowered by half
  • The abolishment of employer PRSI on share-based remuneration was introduced
  • €200m four-year jobs initiative, funded by a 0.6 levy on private pensions, was announced. The scheme, JobBridge, aimed to create 5,000 six-to-nine month placements in private, public and voluntary sectors under the national internship scheme.
  • Education: the allowance for training and materials for participants was reduced from €1,500 to€500; the cost of education allowance, the annual grant that accompanies the Back to Education Allowance, was reduced from €500 to €300 in the Budget; and the payment of training for participants on the Department’s Jobs Initiative Scheme was discontinued
  • The rate of unemployment has increased – albeit modestly – from 13.9 per cent in February of last year to 14.2 per cent last month. The numbers on the live register have fallen, however, by 3,500 – a dip the CSO considers to be effectively zero.
  • The ‘jobs budget’ announced in May saw a controversial levy on private pensions in order to fund measures like VAT cuts in certain tourist-friendly sectors like hospitality, from 13.5 to 9 per cent. A planned increase in the higher rate from 21 to 23 has been brought forward, however.
  • FÁS is to be replaced by SOLAS, but the entitlements aspect of the service has been stripped out of its function, with SOLAS instead placing greater emphasis on “generic, transferable skills”.
  • While the NewERA proposal from FG’s manifesto has been adopted, it does not exist as a strategic infrastructure fund but instead to oversee the management of semi-states, essentially acting as the government’s proxy shareholder in entities like ESB and Coillte.
  • An ‘Action Plan for Jobs’ launched last month outlined a 270-point plan of action to stimulate employment, creating 200,000 new jobs by 2020. We’ll be back to you on that in eight years…

- Additional reporting by Jennifer Wade

Read all sections here: HOW DID THE GOVERNMENT DO IN ITS FIRST YEAR? THIS IS HOW >

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