Half a million people without jobs
Issued : Saturday 28 March, 2009
Statement by Joan Burton TD
Minister for Social Protection
Job creation should be centre piece of budget
I wonder has the sheer horror of that got home yet to Ministers and to the commentators who write daily about deficits and cuts. Is there a more depressing sight than a young person going from place to place just looking for a letter to show he or she has gone out in search of work in order to satisfy the welfare rules.
This summer, many school leavers and college graduates will not even get an interview. These are experiences we thought would never happen again in our country. I can tell you the financial cost of this level of unemployment. There is the cost in increased welfare. There is the loss of income tax and PRSI revenue. There is the loss of VAT when there are no wages to spend. We have the figures but they only tell a cold story. The real cost is the social consequences and the long term destructive effect of mass unemployment.
We have a special budget in 10 days. It will not be about job creation. There is no genuine job-creation commitment in this Government and the budget will undoubtedly accelerate the already grim situation I have outlined. No one in Government has charge of job creation. Every decision is based on headline savings with no regard for the longer term costs that will come when jobs are lost.
Unemployment hurts the person who loses the job. It hurts the family. Unemployment is linked to poor health, to malnutrition, illness, mental stress, depression, poor physical health in later life and reductions in life expectancy. All these are costly to the individual. They also incur a huge cost for the country.
We know there is a strong relationship between crime rates and unemployment. Sustained youth unemployment has particularly heavy costs. We know to our cost from past experience that those that suffer youth unemployment tend to have lower incomes and lesser opportunities in later life.
Youth Unemployment leaves permanent scars. We cannot ,just cannot , allow it to become a feature of life in Ireland.
So what can we do?
It is quite simple. We need to create jobs. The government should make jobs the centre piece of the special budget. There is a case for cuts in PRSI contributions targeted at the low-paid and the young. Apprenticeships have to be protected and continued even when the sponsoring employer goes out of business.
We also need to maintain investment in so called human capital formation with an eye to our country's long term future. We should put in place a scheme to encourage under-25s to be in education as an alternative to becoming unemployed.
It is a crying shame that young men and women who are graduating from our universities and institutes are facing unemployment and emigration. I strongly urge the Minister to take on board various suggestions I and others have made about internship programmes that would enable graduates to get valuable work experience rather than recourse to the dole. I recall the summer work programme that was introduced when we were last in Government to some loud howls of protest. It was based on a core principle that the dole should be a last resort for young men and women. It remains a sound principle and should be revisited.
The social cost of leaving a generation to rot will be far greater than the financial cost of creating jobs and training now. Crime, welfare dependency, children's problems, mental and physical illness and all the other social ills are huge debts that will weigh on Ireland as surely as any projections of future deficits.
Just think for one moment of what we would do if a horrible natural disaster were to happen to our country. We remember how we all rallied during the Foot and Mouth outbreak some years ago. The cost was huge but we knew we had to pay it to protect a vital national industry and a section of the population whose livelihoods depended on agriculture. We face today a national crisis just as grave. We cannot allow one section of the community to face financial and personal ruin through unemployment.
A job creation programme has to be on the budget agenda, in the same way that a national security emergency or an outbreak of foot and mouth had to be afforded before.
The social destruction of long-term unemployment is a national emergency..
Delegates, I have talked about Tax Justice till I am blue in the face and at last this has become the crunch issue as we approach April 7th. The McCaughey case has highlighted how easy it was to set up a perfectly legal tax scheme to avoid a modest 20% tax on a €25 million profit from the sale of a business that had enjoyed multiple taxpayer subsidies. A whole industry has developed among tax accountants and lawyers to facilitate this with the connivance of Fianna Fail Finance Ministers over the past 12 years.
This has to end.
It has to end right now...All the tax exile rules, all the tax shelter schemes, all the fiddles to bypass inheritance taxes,
all the cosy arrangements to allow tax losses be brought forward indefinitely and even back for a year.
Watch out soon for the banks playing that one to get huge tax refunds. It will make you mad with fury.
There will be no common consent from taxpayers to higher tax rates or levies as long as this corrosive culture flourishes. If Brian Lenihan does not grasp this inconvienient but essential truth his Budget will fail and deserve to fail.
My time is running out so let me offer this final thought. It is not the individual elements of the budget package that matter so much as the whole. The whole has to be greater than the sum of the parts because both our own people and the international bond holders want to see a trend and a commitment on April 7th.
We can accept unpalatable measures as long as one principle is understood.
Nothing is agreed until everything is agreed.
That was a sound principle in the Northern peace process discussions. And it remains a sound principle in the preparations for this Budget. Let us see a set of measures that incorporate 3 elements.
Higher Incomes: considerably more
Middle Incomes : definitely more
Lower incomes: a reasonable contribution that does not destroy the purchasing power of the poorest and the elderly.
In conclusion, I don't believe that economic policy is just a matter making the budget numbers add up. It has to be rooted in a sense of values and a clear narrative about the kind of society we want to see.
There is a hostile mood in the county against greed, excess, waste, tax cheating and selfish, self indulgent behaviour; an intolerance of binge lending by banks and vanity spending by government.
The Government has failed to understand this mood. There has been a marked unwillingness to date to share the burden of adjustment in a fair and transparent way. There has been a similar unwillingness to show the door to many of the directors whose actions contributed so much to the turnaround in our country's fortunes.
If this same mindset dominates in 2 weeks there will be no consensus.
Do not underestimate this party's commitment to and willingness to implement sound public finances based on a balanced mix of spending controls and fair taxes.
This Government has little or no political capital to secure public acceptance. It has stayed on too long for any good it can possibly do. To FF I say this : For Ireland's sake Just go .
