A Turning Point for the Irish Economy - speech by An Taoiseach

Posted on 29/05/10 by Brian Cowen

A few weeks ago I spoke about the causes of the banking crisis and its effect on Ireland. Today I want to talk to you about Jobs.

I believe that the economy has now reached a turning point and the challenge now is to move, with confidence and ambition, into a new phase of recovery and renewal.

We have faced, head on, the worst global recession in the history of the State. Instead of ignoring our difficulties, we confronted them. We did not walk away from the challenge, we stood up to it. We made brave and, at times, bold decisions. We did not shirk from doing what needed to be done. These decisions were tough but necessary. And this week, the OECD stated, “after a severe recession in 2009, the [Irish] economy appears to be close to a turning point”.

Recent turbulence in the Eurozone is the most vivid demonstration of the necessity for the decisions we made and the effectiveness of the policies we pursued.

The credit for this success lies squarely on the shoulders of the Irish people. They have borne the tough measures and adapted to the most difficult of circumstances. They have showed Europe and the world a way forward in the midst of historic economic challenge.

While we face another difficult budget ahead, for the Irish economy, the worst is now over. We are returning to growth and, with it, we are seeing an upturn in much needed confidence. While continued turbulence in financial markets is a warning that we cannot be complacent, in spite of the severity of the recession, the hard won gains of the past two decades remain. Economic activity as measured by GDP will be around 30 percent higher this year than 10 years ago, and about 150 percent higher than 20 years ago.

The Jobs Challenge

The greatest economic achievement since the mid-1990s has been the sustained increase in the numbers employed, with almost one-third more people working now than in 1997. Even after the crisis, numbers in employment this year will still be around 1.9 million, compared with 1.7 million in 2000, and 1.2 million in 1990.

Research shows that one of the most important determinants of a person’s wellbeing is their employment status. Having a job not only provides a measure of financial security, it provides a sense of purpose and achievement. I entered politics in the mid 1980s, which was an era of mass unemployment. My constituency in the midlands was a region that suffered more than most in terms of joblessness. So I know well that when a person loses their job, they are losing more than a wage. A job gives dignity, an opportunity to contribute, and a feeling of achievement.

The greatest tragedy of this current recession has been the loss of employment for so many of our people. Hardworking men and women who ask only for the chance to work to support themselves and their families have been denied that opportunity by the cruel reality of an economic downturn that’s impacted upon millions across the world. Our first job in government is to look out for them and help them find jobs so that they can contribute to the well being of their families, their communities, and our country.

While the labour market looks like it is beginning to stabilize since the end of last year, around 270,000 on the live register are full-time unemployed and in receipt of payment, with a further 75,000 in part-time employment receiving benefits. It is a particular worry that unemployment remains high amongst young people. We are focusing assistance more directly towards this group and ensuring that all possible options are explored to provide them with opportunities to improve their skills and to find jobs.

Ireland’s problems in this regard are not unique. The UK unemployment rate stands at about 8%, the US unemployment rate is about 10% and the Spanish rate is around 20%. Notably, unemployment in Silicon Valley is around 12.5% which is similar to the Irish unemployment rate.

We have all heard the criticisms of this Government in respect of a jobs strategy. In my view, these criticisms are ill-informed and many are motivated strictly by the desire to gain political advantage.

Some have claimed that we have bailed out the banks and turned our back on the unemployed. But that is simply not true. In fact, they are wrong on two fronts:

It is clear that without stable public finances and a reformed banking system there will be no return to job creation. The truth is that the purpose of our entire economic strategy is to sustain and generate jobs. Those who say we can save jobs while allowing financial institutions to fall and fail are closing their eyes to the most basic necessities of a market economy like ours, which is built on international trade and sustained by the free flow of capital and commerce.

And the decisive action we have taken has seen stability restored during 2009.

The latest indicators are consistent with our expectations of a return to economic growth during the course of the year. In fact, some commentators believe that the economy has already begun to grow again.

And the European Commission and OECD now project that Ireland’s GDP will grow next year at 3% - double the euro area average.

A particular feature of Ireland’s economic crisis has been the dramatic collapse in the construction sector – and consequent loss of over 140,000 jobs from the peak.

This is the single most significant factor in the labour market – and finding alternative jobs, in sustainable sectors, will be the defining challenge over the next few years.

Ireland’s Framework for Economic Renewal

But we are pursuing a very clear and well-defined strategy to meet that challenge by generating sustainable jobs in this country.

We first outlined this strategy in December 2008 when we published our medium-term economic plan - Building Ireland’s Smart Economy.

In that document, we set out our vision for sustainable economic renewal, based on increasing productivity across all sectors of the Irish economy.

We identified five action areas where we are restructuring so that we would be well-positioned to benefit as the global economy recovers.

The Role of Government in Job Creation

Before I set out the specifics of our approach to generating jobs, I want to say a few words about the Government’s role in tackling unemployment.

Firstly, our trade amounts to 150% of GDP – making us one of the most globally-integrated economies in the world. By necessity, our future economic growth will have to be driven by exports of goods and services.

Increased exports will generate jobs directly in the provision of those goods and services. Importantly, it will also generate indirect jobs throughout the economy.

Secondly, sustainable job creation will have to be driven by the enterprise sector. Government must provide the conditions and support to allow Irish-based businesses to sell goods and services abroad, and bring forward initiatives to drive growth in targeted sectors.

Thirdly, the effectiveness of our labour market policies will play a large role in determining how quickly economic growth translates into new jobs, and who gets those jobs when they are created.

We need to ensure that we have the right incentives for employers to create jobs, and that people on the Live Register are incentivised and supported to take-up those jobs.

10 Areas for Job Creation

Within this framework, the Government has identified ten areas where our economic renewal plan will ensure we generate the jobs we need:

Confidence, Credit, Costs, Infrastructure, Innovation, Foreign Direct Investment, Small Business, Green Enterprise, Agri-food, and Tourism.

1. Confidence

Our first route to job creation relates strongly to the importance of confidence - confidence to lend, confidence to spend, confidence to invest, confidence to hire.

International confidence is essential to foreign investment and lowering the borrowing costs facing the Government and the banks.

Despite the current uncertainties within the Eurozone, international confidence in Ireland has been greatly increased by the difficult decisions we have already taken.

The latest Exchequer Returns show that tax returns are on target for the period to end-April, and they will strengthen as the economy returns to growth.

This shows the benefit of the difficult decisions we took last year. As our experience in the 1980s demonstrated, in a small open economy like Ireland’s, firm action to correct fiscal imbalances can have a strong positive impact on the confidence of consumers and investors. In this regard, we have been the masters of our own fate and the confidence that international investors have expressed in Ireland is already yielding positive results.

Clearly Ireland’s international reputation suffered during the crisis. But recent and forthcoming investments by IDA clients are a sure sign of returning confidence.

None of this is to underestimate the scale of the challenges that lie ahead. We will deliver on the €3 billion adjustment required in 2011 – as the next step in the plan the Commission have endorsed for returning the deficit below 3% by 2014.

Increased confidence will lead to increased consumer spending as people feel less need to save everything they can out of fear of the economic future - thereby supporting jobs in areas like retailing, local services and construction.

The Government introduced VAT and excise reductions in the Budget which have helped to support consumer spending and reduce the flow of cross-border shopping.

The car scrappage scheme has also proven its worth with a resumption in spending which is reflected in higher car sales.

The indicators are positive. Consumer sentiment is improving steadily and, in April, exceeded levels last seen in early 2008. The volume of retail sales in March is up nearly 4% on a year previously and most recent data show that, for the first time in over two years, this figure has shown growth.

Further recovery in domestic confidence will come from knowing that Ireland is on the right path, that the Government will continue to take necessary decisions, and this will lead to the job creation that we need.

2. Credit

The second priority area is credit. Credit is the lifeblood of the economy. We need a flow of credit to sustainable businesses, allowing them to grow, expand and create jobs. Credit for business will become more important as the economic recovery gains pace.

We introduced the Code of Conduct on Business Lending to Small and Medium Enterprises (SMEs), which took effect in March 2009. This Code facilitates access to credit, promotes fairness and transparency and ensures that banks will assist borrowers in meeting their obligations, or otherwise deal with arrears in an orderly and appropriate manner.

We have monitored trends in credit availability closely in consultation with the business sector.

That is why the recent banking announcements include specific lending targets set for small firms, and an independent Credit Review Process which is led by John Trethowan. Not only will businesses be able to appeal refusals of credit, but trends in lending by institutions will be assessed.

The Minister for Enterprise, Trade and Innovation, Batt O'Keeffe, is also meeting with small business-owners throughout the country over the coming weeks to hear their first-hand accounts of difficulties in accessing credit.

The Minister has also called bank representatives into his Department to ascertain what they are doing for viable but vulnerable businesses who continue to be adversely affected by the failure to provide adequate credit at the present time.

Banks must play their part in assisting national recovery. Our position is simple - if the banks are not working for small business, then it is our responsibility as a Government to make sure that they do.

The Irish people stood up and backed the banks of Ireland in their hour of greatest need – not for any love of banks but in the knowledge that, without a functioning banking system, we do not have a functioning economy. Now it is time for the banks to stand with the Irish people, to do their job responsibly, and to provide credit to viable Irish businesses that are the engine of job creation.

The banks need to understand that we are all in this together, and that the burden which has been shouldered by the Irish people must not only be repaid but must also be respected. That respect will best be manifested in the free flow of credit and the encouragement of commerce that is a prerequisite to sustained economic growth.

 

3. Costs

As the world economy recovers, we must ensure we are well positioned to benefit. Economic rrecovery and job creation requires a reduction in our relative cost base so that we are competitive with the rest of the world.

A significant adjustment in relative labour costs is underway. The European Commission forecast that our Unit Labour Costs will fall by 9.4% over the 2009 to 2011 period, against a projected increase of 3.5% for the Eurozone. This would mean a 13% improvement in Unit Labour Costs relative to the Eurozone.

In addition, the fall in wage costs has led to a significant improvement in public sector competitiveness.

Another indicator of improving competitiveness is that the price level is also falling relative to the rest of the Eurozone. Prices in Ireland fell by 2.5% in the twelve months to April, in contrast to the rest of the euro area where they rose by 1.5%.

We introduced an extensive package of measures to contain energy costs last summer – and this is reflected in a much improved position relative to competitors. Data released on Thursday shows that electricity and gas prices fell for all types of energy consumers in the second half of 2009, and have moved closer to the EU average for most business users.

Our continued investment in infrastructure - for example, the completion shortly of the major inter-urban routes – will further enhance our competitiveness.

A Working Group has been established on the issue of commercial rent reviews and will report before the end of June 2010. Following the ban on upward only reviews in new leases, the Group will focus particularly on the arbitration process and the adequacy of the information available to all parties in the context of commercial rent reviews.

While more improvements are required, our enhanced competitiveness is bringing us back into contention for foreign investment that previously we had been too expensive to win.

However, analysis from the National Competitiveness Council shows that there are a number of areas where substantial further work is required. Their data show that prices in business services have not fallen as significantly as in other sectors.

The issue of legal costs, in particular, is being considered in the context of the Legal Costs Bill which is being developed by the Department of Justice. But there are steps which the professions could take themselves. And a good start is to benchmark fees charged in Ireland against those in other jurisdictions. Government will be exploring all options to drive down costs in this area.

Likewise, local authority charges remain a great concern of the business sector and we are conducting an Efficiency Review of the whole local authority system at present to identify savings which will reduce pressure on small business.

4. Infrastructure

The fourth area that will drive employment creation is our continued high level of investment in infrastructure which supports jobs in two ways.

Firstly, it generates jobs in the short-term, for example in construction projects.

Secondly, the investment increases the productive capacity of the economy, increasing competiveness and supporting long-term jobs.

This year we will invest €6.5 billion, which is in the region of 5 percent of GNP – proportionately one of the largest capital programmes in the EU.

Our investment in 2010 includes a focus on labour-intensive areas such as school building and maintenance, energy-efficiency measures and our tourism infrastructure. This public investment programme is expected to support approximately 70,000 jobs.

The Commercial Semi-State Companies in the energy field - ESB, Bord Gáis and EirGrid - are also delivering major multi-billion investment programmes. In fact, this year alone, it is estimated that they will spend almost €2 billion on their power generation and transmission networks.

All together, non-Exchequer capital investment will support a further 30,000 jobs.

The National Broadband Scheme will also be fully rolled out by September 2010, providing broadband access across the country, supporting job creation in the regions.

However, we clearly need more progress on next generation broadband infrastructure to support jobs. For example, enormous opportunities are opening up in the world of Cloud Computing services and Ireland has an opportunity to be a leader in the development and use of such technology.

Our broadband market is now growing rapidly after a slow start. And this year will see availability of the first 100 Megabits-per-second consumer services.

Ensuring the right market conditions for the further investment necessary in next generation infrastructure and services is a priority goal for the Government.

The Water Services Investment Programme involves investment of €1.8 billion over the period 2010 and 2012 and addresses identified deficits. Investment under the Programme will support over 4,000 jobs in the construction sector this year and will support many additional jobs in manufacturing and in operating and maintaining the new infrastructure.

This year’s investment is part of a projected infrastructure spend of just under €40bn between now and 2016. And, at the same time, we are getting more for less because of a significant fall in project costs.

The Government is currently finalising a review of this capital programme to align it with closely with our strategy for sustainable growth and employment creation. The review will prioritise those productive investments which will support jobs, for example, the recommendations of the Innovation Taskforce.

We are using Public-Private Partnerships as a source of additional investment and are working with the pension industry to identify ways to increase the use of private sector finance for infrastructure.

5. Innovation

At the heart of our jobs strategy is the need to increase rates of innovation across the economy, not only in the high-tech sectors but in all sectors.

To position Ireland as a Global Innovation Hub, we must make Ireland:

- the best place in Europe to turn research and knowledge into products and services;

- the best place in Europe to start and grow an innovative company;

- the best place to relocate or expand and scale a Small Business; and

- the best place in Europe for research-intensive multinationals to collaborate with each other and with clusters of small companies.

The Innovation Taskforce, which reported in March, has shown that Ireland can do this: many of the world’s leading multinationals already have operations here; we have built-up our research base over recent years; we have a very high rate of entrepreneurship; we have a young, and increasingly well-educated population, and we offer an English-speaking, business-friendly location.

This will help create jobs right across the economy: in new start-ups and existing enterprises; in multinational companies and small firms; in high tech sectors and traditional sectors.

If we do this successfully, we can create a step change in the number of new jobs we create over the next decade – the Taskforce suggested the potential to generate 117,000 jobs over the period to 2015.

The Taskforce has made a wide range of recommendations which help increase levels of innovation and generate the jobs we need. Minister Batt O’Keeffe is now chairing the Implementation Group which includes experts from the private sector as well as key officials.

The Taskforce will build on significant improvements as set out in the Framework for Economic Renewal, Building Ireland’s Smart Economy, published in December 2008. Under this Framework, we have already made:

- significant improvements to the R&D tax credit in the 2009 and 2010 Budgets,

- new tax arrangements for Intellectual Property (IP),

- tax incentives for start-up companies and to encourage venture capital companies to locate in Ireland to provide much needed finance for firms.

The NTMA and Enterprise Ireland are market testing the €500 million Innovation Fund which aims to attract leading international venture capital firms to establish a base in Ireland, supporting the establishment and scaling of Irish businesses.

We continue to invest heavily in knowledge which increased at an annual average of around 10% in the last decade, compared with EU and OECD averages of around 3%. Economy-wide R&D spend has trebled over this time, with two thirds coming from the enterprise sector. R&D investments now account for over five-in-ten new IDA projects.

There are currently 29 SFI funded top-class research centres in operation that are transforming Ireland's scientific reputation, working with industry partners and focusing on active commercialisation of research outputs into new products and services. An Action Plan for Health Research is being implemented with great potential for job creation given our existing base of medical device and pharmaceutical companies.

In 2010, agri-food research is being prioritised through an investment of more than €24 million in the food and forestry areas.

We will shortly finalise a new national strategy for higher education, which will address its key role in Ireland’s economic recovery and are committed to a fifth cycle of PRTLI funding with a focus on links between education and enterprise.

Ireland’s two largest universities - Trinity College and UCD - are implementing a joint venture in enterprise development, providing new and stronger mechanisms for technology transfer and business support. A strategic alliance between NUI Galway and the University of Limerick has also been announced recently, including a commercialisation relationship with GeorgiaTech, which has located a base here in Athlone.

The Technology Actions to Support the Smart Economy report outlines a number of initiatives such as a new International Content Services Centre and making Ireland the leading location for energy-efficient data centres such as the $500 million Microsoft Centre, which opened in September 2009.

In summary, making Ireland a Global Innovation Hub will generate new jobs and new enterprises, and also help sustain existing jobs as firms move into higher value-added activities.

And I want to be clear, despite what some have said, the Smart Economy is not just about high-tech employment. It is about people thinking smarter and working smarter, getting more for less across all sectors of the economy. It is about process innovation as well as technological innovation. It is about the public sector as well as the private sector. It concerns the domestic economy as well as the internationally-traded sectors.

There is no distinction between the Smart Economy and the rest of the economy. The entire Irish economy must be a smart economy, that is to say, a high-productivity economy if we are to compete with the rest of the world.

Improving the quality of products and services and the processes by which they are manufactured and sold is equally important in retailing, tourism and agriculture are it is in Financial Services, ICT and Pharma. Innovation in all sectors is a crucial driver of job creation of all types.

A strong outcome of the Farmleigh Global Irish Economic Forum was that culture and the arts can play a key role in economic development alongside our innovative enterprise sectors. For centuries, Ireland has had a proud tradition of cultural innovation. We are known for our literature, our theatre, our art. But we are also now known for our innovation in science, technology and business. We must harness the best asset Ireland has to offer – the talent and ingenuity of our people – to drive job creation. As the IDA’s campaign says - Ireland is a place where ‘innovation comes naturally’.

6. Foreign Direct Investment

The sixth area, which will continue to be an important source of new jobs, is Foreign Direct Investment.

Despite the global crisis, in relative terms, Ireland performed very well in 2009. FDI decreased globally by 30% but the number of foreign investments in Ireland decreased by only 4%.

Already in 2010, despite very difficult global conditions, we have announced over 2,250 jobs in strategic investments including:

- An expansion by PayPal;

- A new European HQ for Warner Chilcott;

- IBM’s first Smarter Cities Technology Centre;

- An International Energy Research Centre in Cork;

- Merck Sharp and Dome’s new services centre; and

- EA Sports in Galway.

These are just some examples of the progress we are making – and it shows that Ireland is retaining its competitive edge.

The IDA has launched a new Strategy which sets the target of securing 62,000 new jobs over the next five years – which will generate an additional 43,000 jobs elsewhere in the economy.

The IDA is targeting three new sectors:

- convergence, particularly between the life sciences and IT sector

- cleantech, including environmental goods and services, and

- innovation and services.

While deepening relationships with the US and our main EU partners, they will be targeting new opportunities in China, India and the Middle East and I and every member of the Government will be supporting them.

The IDA has launched a major new marketing campaign in the US, based on the ‘Innovation Ireland’ concept; this has received widespread praise and is a key strategic tool to assist the organisation in selling brand Ireland thus winning more FDI for Ireland. Enterprise Ireland and other agencies will adopt similar branding.

One crucial instrument for attracting foreign direct investment is our corporation tax rate. Let me reiterate today what I have said before - this Government will not compromise our ability to set the rate of taxation in a way that best encourages job creation. Ireland has been and will continue to be a great place for foreign direct investment and that will not change. So, as long as I am Taoiseach, our 12.5% corporation tax rate will not be increased and will remain at the heart of our strategy to attract ongoing foreign direct investment.

The considerable improvements in Ireland’s international tax offering in recent years were further consolidated in Budget 2010 with a range of new measures to boost growth including for start-ups, for R&D, and to further develop Ireland’s international financial services sector.

International financial services currently supports about 25,000 direct jobs in Ireland, with another 2,500 indirect jobs in support services such as law and accountancy firms.

The IFSC has weathered the storm remarkably well, and we are now targeting new opportunities for job creation in areas such as the potential for a green initiative within the IFSC – where a feasibility study is currently being finalised, intellectual property, and Islamic financial products.

There are many other opportunities which the Government is pursuing in the area of international services.

For example, international students are generating almost €430 million for the economy annually. We intend to exploit the potential of increasing international student numbers by re-positioning the ‘Education Ireland’ brand to capture a far greater market share – bringing with it income and jobs.

The pipeline of inward and indigenous investment in film and audiovisual content production remains healthy because of the continuation of direct targeted skills and production funding by the Irish Film Board and the Section 481 investment relief.

This summer, the Government will publish an updated enterprise review which will identify these and other new areas of opportunity and how to translate them into jobs.

7. Small Business

Enterprise Ireland’s objective is to create 40,000 new jobs over the next five years. Through the multiplier effect, this will lead to an additional 28,000 jobs elsewhere in the economy. Many of these new jobs will come from the small business sector.

Last year we acted to help small business survive through the crisis. We introduced the employment subsidy scheme which will support about 80,000 jobs, and the Enterprise Stabilisation Fund which supported about 7,500 jobs last year alone. We also introduced formal arrangements to reduce the payment period by central Government Departments to their business suppliers from 30 to 15 days.

Now that there are signs of recovery, our focus is on helping small firms to grow and create jobs again.

We have introduced a scheme of tax exemption on the income and gains of new start-up companies over the first three years of operation, and this is available to companies who commence trade in 2010.

We are encouraging recruitment of extra staff by introducing a new scheme which foregoes the PRSI levy in certain circumstances where a person has been unemployed. The detailed scheme will be launched very shortly and will be available to all qualifying jobs created in 2010.

This is a win-win scheme. It will help businesses grow and it will help individuals back to employment.

We have established a new procurement policy and guidelines to stimulate innovative business activity in Ireland and facilitate greater access for all SMEs in both exporting and non-exporting sectors.

I want the State to take a more proactive role in supporting business and jobs. This is a key recommendation of the Innovation Taskforce report which states that procurement can be used to purchase innovative new services for the State, which in turn fosters co-operation between companies operating in Ireland in the development of products and services. These can then be sold on international markets and generate significant employment.

It is a competitive global environment but, by being innovative and supporting our SMEs, we give ourselves every advantage as the global economy recovers.

The High Level Group on Business Regulation has identified more than €20 million worth of administrative cost savings for business in its first report, through cutting out paperwork, revising the rules for small businesses and making better use of online services. We are working to reduce further administrative burdens in the three key areas of company law, health and safety, and employment legislation.

The County and City Enterprise Boards will continue to provide support, both financial and non-financial, to small businesses.

The Government will be continue to consult with the small business sector to identify further ways we can help small businesses to grow and create new jobs.

8. Green Enterprise

Another area providing opportunities for job creation is Green Enterprise.

The Green Enterprise Action Group reported that the value of the Irish GreenTech sector is already estimated at around €2.8 billion. Last December the Action Group published proposals which they believe could create 80,000 new jobs over coming years.

Implementation is being overseen by the Cabinet Committee on Economic Renewal and there has already been significant progress.

A new €130 million National Energy Efficiency Retrofit Programme announced in Budget 2010 will enable energy efficiency improvements in over 60,000 homes and buildings in 2010 alone, supporting 5,000 jobs and conferring significant comfort, health and environmental benefits.

We will build on this to establish a multi-annual support programme for retrofitting of homes, creating a new sector to employ many who have lost their jobs in construction.

Ireland has made major progress in renewable power generation. We have already exceeded our target for end-2010 of generating 15% of electricity from renewable resources. We are on track to meet our 2020 target to have 40% of Ireland’s electricity produced from renewable energy. This will reduce our dependence on imported fossil fuels and help to provide stable energy prices.

The unprecedented development of Ireland’s electricity grid will see investment of €4 billion up to 2025. This will be a key driver of economic growth and recovery over the coming years. By enabling renewable electricity integration it will ensure that Ireland achieves its target of 40% renewable electricity by 2020, which will drive investment and job creation in areas like wind and ocean energy.

Similarly, increased interconnection with the UK and elsewhere will enhance competition, ensure greater security of supply and provide new markets for renewable electricity generators. All of these factors will underpin economic growth and job creation.

The Government has set an ambitious target of 10% Electric Vehicles in the national car fleet by 2020 – creating business and employment opportunities for Ireland through early-mover advantage in this area.

A major Smart Meter Pilot Programme is underway, involving up to 14,000 electricity and gas meters. The Pilot will determine the optimum and most cost effective technology and systems, as well as testing customer behaviour to inform the roll out of the National Smart Meter Programme.

The IDA is to develop a Flagship Green Business Park which will meet the highest green international building standards and act as a test site for new technologies and sustainability.

We have expanded the scheme of Accelerated Capital Allowances for energy efficient equipment to allow companies claim 100% capital allowances on eligible equipment across more than 40 areas of technology and over 4,000 eligible products.

The Department of Agriculture, Fisheries and Food launched a new Bioenergy Scheme in February to grant aid miscanthus and willow planting to the end of 2012.

This scheme, together with support price structure for bio-energy announced earlier this week, will foster the development of a robust and sustainable biomass supply sector in Ireland. These tariffs will cement existing jobs in place across a range of industries in Ireland, and will offer businesses the opportunity to produce their own electricity and sell the surplus to the national grid.

9. Agri-food Industry

The agri-food sector remains a bedrock of the Irish economy.

As well as 120,000 primary producers, the agri-food sector employs over 45,000 people in over 800 companies throughout the country.

Despite the difficulties of the past two years, the industry has proven itself to be robust and resilient.

We are working to ensure that the industry is positioned to benefit from global population increases and consequent increases in demand for food, with food production expected to increase by 70 percent over the next forty years.

A focused strategy to chart the direction of agri-food, forestry and fisheries for the next decade is being prepared and I have asked Minister Smith to ensure it is finalised by June. It will include ambitious targets for growth in these sectors, securing sustainable employment.

To support this, a new €100 million fund has been established to improve the food industry's competitiveness over the next four years. The roll-out of this fund has started in 2010 with €9.5 million being provided to enable key exporting companies to adopt sustainable lean business practices and to support marketing initiatives.

The Government’s Rural Development Programme includes funding of €425m over the period from 2009 to 2013 - it is expected that approximately 10,000 new or existing micro-enterprises will be supported over the lifetime of the Programme, providing jobs in the regions.

10. Tourism

The tenth and final area of focus in our jobs strategy is the tourism and hospitality sectors, which support approximately 200,000 jobs and are another important part of our jobs strategy.

The Tourism Renewal Group has set out a Framework for Action for tourism's survival, recovery and growth, supporting exports and jobs. Its recommendations are being progressed by Departments and industry.

The close partnership with the tourism industry was highlighted by the impressive response of all parties to the impact of the Volcanic Ash – including agreement on a Customer Charter.

We are working closely with business, with direct supports and advice to help them manage costs and sustain employment.

The Tourism Services Budget has been increased, while the allocation to Fáilte Ireland for capital investment in tourism product was increased threefold to €21 million in 2010.

We have a marketing drive underway this year in key markets in Great Britain, the United States, Germany and France.

Fáilte Ireland has launched a promotional campaign to encourage holidaying at home this year with a budget of €4million.

The National Conference Centre – to be named ‘The Convention Centre Dublin’ – is on schedule to open in September 2010 and will be an important resource for the growth of business tourism.

The redevelopment of Lansdowne Road Stadium – to be named ‘The Aviva Stadium’ – has been completed with significant Government support and will help Dublin attract more international sporting events.

The cultural sector remains an important source of jobs in its own right, as well as contributing to tourism and other economic sectors.

The growth of Ireland's cultural sector has been assisted through support for redevelopment of key cultural venues, such as the Cork Opera House, Wexford Opera House, Theatre Royal Waterford, and the Science Gallery, Dublin. Visitor numbers continue to grow at the National Cultural Institutions, owing to sustained investment in exhibitions, collections and visitor services.

And before the end of the year, when Terminal 2 in Dublin Airport opens, visitors to Ireland will receive the welcome of a proud modern nation. This new terminal will serve as an exciting front door into our country for millions who visit, and is another lasting testament to the fact that the investments we have made during the course of the last fifteen years will have an enduring impact on our economy and on Ireland’s image in Europe and the world.

Helping People Who Have Lost Their Jobs

The worst impact of the global and national recession has been the loss of jobs. While the Government’s energy is focused on ensuring new jobs are generated as quickly as possible, experience in Ireland and abroad shows that it will take time to generate jobs on the scale required.

The Government’s strategy is to support those people who have lost their jobs to make sure they can get back into employment as more jobs are created.

Firstly, we will provide the training, activation and education supports they require. In 2010, training and work experience activation provision has increased to 157,000 places compared to the 66,000 places that were delivered in 2008.

Higher education institutions have been responding to increasing demand by increasing the number of places they offer. CAO acceptances for the 2009/10 academic year were up 8.3% on the year before. The total number of full-time enrolments in higher education institutions aided by the Department of Education and Science is projected to be more than 155,000 for the 2009/2010 academic year.

In 2010, almost 48,000 learners will participate in full-time further education through the Youthreach, Vocational Training Opportunities Scheme, Senior Traveller Training Centres and PLC programmes. An estimated 125,000 learners will participate in part-time programmes under the adult literacy, community education and Back to Education Initiative schemes.

The new Activation Fund announced in Budget 2010 will support innovative private-sector projects which target the low skilled, the under 35s and those formerly employed in the construction, retail and manufacturing sectors.

Additional staff have been redeployed within FÁS to meet the increased demand at Employment Services offices. As a result, planned annual job search referral capacity is expected to be 154,000 places this year. This is nearly double the 2008 annual job search referral capacity.

Where possible, we are using thee European Globalisation Adjustment Fund (EGF), with matching funding from the National Training Fund, to support the retraining of redundant workers, in the case of large-scale company closures.

We have also recently restructured Government Departments to better align our activation and training policy and delivery. This will maximise the impact of our efforts to support people into employment.

Secondly, we need to fine tune our labour market policies so that we provide the right incentives and avoid poverty traps which keep people out of work.

We need to ensure that the social welfare and tax systems, and other State supports, incentivise and support people back into employment. Equally, they must help employers to create jobs.

We already made some significant decisions in the 2010 Budget to increase levels of conditionality attached to payments, and we may need to take further imaginative and sometimes difficult decisions, to avoid people becoming stuck in long-term unemployment as jobs become available.

Conclusion

This Government has not shirked its responsibilities. We have faced head on the worst global recession of our lifetimes. Our bold actions are designed to meet these challenges. National and international commentators have recognised that the Irish economy is turning the corner.

But, we need to acknowledge that the outlook - the international outlook in particular - is not yet as secure as we might like. That is why we must keep a clear focus on those factors that are ours to control.

The Government’s entire economic strategy is focused on jobs – and I have outlined the ten areas around which our jobs strategy is based.

We will continue to listen closely to, and welcome, new ideas from the business community and all sectors of the economy that will help us rise to the jobs challenge.

We are not promising overnight solutions but I can assure you that we are, as a priority, tackling the issue by improving competitiveness, protecting existing jobs and improving the conditions for new jobs to be created. When hit with an international financial crisis of this magnitude, jobs cannot be created in a vacuum. Long term sustainable job creation can only come about by putting our public finances back in order, fixing the banking system and pricing ourselves back into the markets we serve. Ireland is doing those things and we must persevere with this strategy for recovery on the hard road back to prosperity and an expanding economy again.

The government is focused on this key task at hand. We understand that creating jobs is the centrepiece of economic recovery and the plans I have discussed today are at the heart of our long-term economic strategy.

The Fianna Fáil Parliamentary Party will play a key role in identifying additional initiatives - consistent with budgetary discipline – to help those who are currently unemployed or seeking employment to find opportunities in which they can more actively contribute to economic and social recovery in our country.

And the reason all of this is so important, is that it is our duty and responsibility to secure the future of this nation for our people and our children.

We will continue everyday in government to work as hard as humanly possible to implement the right policies, to introduce where possible further initiatives, and to see through to completion the decisions we have taken and the plans we have made.

Together we can build a stronger, fairer, more secure Ireland, and we in Fianna Fáil are absolutely committed with our partners in government to achieve that over the coming years.