Government's latest response to job creation challenge: Give 5,000 small firms €2,000 a year for ten years

Posted on Friday, 25 November 2011

Minister Richard Bruton has announced the launch of the Government’s multi-annual Action Plan for Jobs. This has been announced on several previous occasions but this time it has a little more information. Government’s target is to create 100,000 extra jobs by 2015 and to have two million people ‘back at work’ by 2020. Towards reaching this target it proposes to make €2,000 a year available to 5,000 businesses for a decade.

In support of its job creation targets the government has set out its plan to make €100m available in a Micro Finance Loan Fund to benefit 5,000 businesses over a ten year period. On examination of the proposal the government hopes that by providing an average of €2,000 per annum to 5,000 businesses for ten years it will get two million people back to work by 2020.

Social Justice Ireland believes that this plan is neither adequate nor credible in terms of job creation. Domestic demand has fallen by 20% since 2007and is expected to fall again next year according to the Government’s own forecast. Serious questions must be asked of government. Policy is relying on export led economic growth at a time when there is extreme uncertainty in international financial markets and the expected growth rates in the Eurozone, the UK and the US are all looking bleak. Government will not see any great increase in job numbers without first creating a situation where domestic demand increases. 

The government acknowledges in its Medium Term Fiscal Statement that its own projection of a decline in unemployment to 11.6% by 2015 (a reduction of approximately 52,000) is based on assumptions that more job seekers will emigrate or otherwise withdraw from the labour force. 

Yet again the government has shown that it has neither the vision nor the strategy to tackle the growing unemployment problem.   Social Justice Ireland has presented to government a fully-costed proposal on a Part Time Job Opportunities Programme which would take 100,000 of those who are long term unemployed off the live register and back into the labour market. This proposal has already been piloted successfully between 1994 and 1997 and presents Government with a clear opportunity to tackle the structural problem of long term unemployment. 

Social Justice Ireland urges government to act on this proposal immediately to prevent a worsening situation of structural unemployment developing in Ireland. The plans unveiled by Minister Bruton yesterday are wholly inadequate to deal with the present situation.

Information regarding Government’s Action Plan for Jobs can be downloaded below

Medium Term Fiscal Statement can be downloaded below