Getting Ireland back to work

A new Irish Government takes up office next week after a hard-fought election in which just about every party and candidate claimed that jobs were the number one priority. So if jobs are to be a focal point for the new Government, what can we expect from the incoming Dáil?

Whether any or all of these schemes remain in place by the year end remains to be seen. The leading party in the incoming government, Fine Gael, is proposing as part of its jobs strategy to retain and extend many of the programmes, but as might be expected it has rebranded them and plans to extend the number of places on offer in each:

• Its National Internship Programme (23,000 places) will offer part-time, one-year placements in the public service, private sector and voluntary sector for unemployed graduates. The objective is for interns to gain experience while studying for a masters degree or diploma. The payment will include a €3,000 bursary to help fund each individual’s higher education. Among the positions planned to be available will be classroom/teaching assistants in schools and nursing assistants in hospitals. IDA Ireland and Enterprise Ireland will be explicitly mandated to develop 5,000 work experience placements in the companies that they support.
• FG’s Second Chance Education Programme (17,000 places) will offer former retail and construction workers that did not finish secondary school either college or back to education placements for two years. Participants will receive a premium payment of €20 per week on top of their social welfare payment, a €500 contribution towards book costs, and a €3,000 completion bonus.
• The Apprenticeship Guarantee (700 places) will offer unemployed craft apprentices direct employment by the State, State agencies or semi-State organisations until their apprenticeship is completed. The number here is slightly lower than the outgoing government’s Redundant Apprentice Placement Scheme as the number of apprentices will decline each year over the next five years.
• FG’s version of Tús, Community Employment, will also provide 5,000 funded places, again mainly for short-term positions in community organisations.

While the items mentioned above are specific, costed policies Fine Gael’s main employment plank consists of targeted job creation by allowing public-private partnerships and private investments in sectors such as water, telecoms infrastructure, renewable energies, smart-grid, bio energy and forestry. Job creation in these sectors will be funded by the sale of some existing, ‘non-strategic’, state assets e.g. Bord Gais energy production. Costs will be recovered in the longer term by the sale of equipment and services to businesses and the public e.g. water meter installation costs will be billed over time.

Welfare payments are to be reformed to make re-entry into paid work more attractive and to place new responsibilities on the unemployed while in receipt of State support. Among the changes mooted by Fine Gael are a reduction in the frequency of signing on (currently once a month) in favour of a more meaningful schedule of engagement with Jobseekers (for example, an in-depth, quarterly review); a specific focus by the PES to match up available talent on the Live Register with existing vacancies in Irish companies; conversion of rent supplement and other secondary benefits into means related supports that are unaffected by working status (with tapered withdrawal); and a requirement for under 25’s to maintain a Jobs Diary recording search experience and skill enhancement activities, with sanctions for unreasonable rejections of training and job opportunities.

As a final act, it is promised that the Minimum Wage is to be restored to its level prior to 1 February.

The most likely coalition partner, the Labour Party, is proposing to establish a Jobs Fund of €500m to carry out a number of job creation activities. Despite producing a large number of policy documents in recent months many of its proposals lack specifics about how this money will be invested and how it will link to jobs growth. Where they have been specified, they largely follow the pattern outlined by Fine Gael above. Some examples of what the party has said in recent press releases and policy documents include:

Extending the previously mentioned Employer PRSI Incentive Scheme, and extending the exemption period to 18 months, to incentivise employers to employ people who have been on the Live Register for 6 months or more.

A graduate and apprentice work placement scheme similar to those outlined above, but coupled with an earn and learn scheme to combine short-term working with study.

Reducing the qualifying period for the Back to Education and Back to Work Enterprise Allowance to three months, and allowing for greater access to postgraduate courses under the Back to Education Allowance.

Creating Skills Exchanges to tap into the wealth of work experience of those currently unemployed.

While there are some points of differences between Fine Gael and Labour’s policies most are compatible.

It will be interesting to see if the Government adopts any of the suggestions put forward by other parties such as the Greens (who longer have any seats in the Dáil), Sinn Fein and groups of independents such as the United Left Alliance. In contrast to the larger parties’ suggestions many of the ideas for job creation from Sinn Fein, the United Left Alliance and Socialist Party suggest obtaining funding from the dwindling National Pensions Reserve Fund, increased borrowing, or utilising borrowings that might otherwise be used to fund Irish banks in order to finance job creation. The fact that this funding model is unworkable and that many of their initiatives will cost money means that they are unlikely to proceed in their manifesto form. However as some ideas could be low cost or cost neutral they may be adapted by the ruling parties over the coming two years in order to ‘kick-start’ the domestic economy, particularly in services.

Among the plausible ideas suggested by the smaller parties are a national approach to the agrifood industry i.e. one brand such as Kerrygold for all Irish food; building a series of public, local, healthcare centres in preference to large, centralised hospitals which would require a switching of funds; school and crèche building and refurbishment acceleration; and both bringing forward maximising employment on public infrastructure projects such as Metro North and the Western Rail Corridor over the next five years. While these are costly in the short-term both FG and Labour have indicated, in recent days, that they might include some of these proposals in their jobs strategy which is due to be announced in 100 days time.