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Talking Points for the Taoiseach on the Jobs Initiative

 

  • Today’s Initiative is one more step in delivering the promise in the Programme for Government to get Ireland working again.

 

  • This Government has inherited an enormous and unprecedented economic challenge. We are determined to meet this challenge head on.

 

  • We have hit the ground running. Following three years of dithering by the previous Government, within three weeks of coming into office the new Government announced a radical and comprehensive restructuring and recapitalisation plan for the banking system that is being viewed as credible both to depositors and international markets

 

  • After six weeks, we completed a re-negotiation of the IMF/EU Programme of Support to minimise the burden on the taxpayer and to create the flexibility needed to put greater focus on employment and growth in the economy. During these negotiations, we secured the endorsement of our external partners for today’s Initiative.

 

  • Today, ten weeks into office, we have announced the details of the Jobs Initiative. This is, as the Minister has emphasised, only a down-payment by this Government on its promise to put jobs and economic growth at the very top of the political agenda. Underpinning the Government’s recent economic projections is a forecast for the creation of a net additional 75,000 jobs by 2015. Every Minister in my Government will work to deliver, and indeed to improve on, this employment forecast.

 

  • The Minister has already announced the details of the Initiative, so I want to make just a few brief remarks.

 

  • We are re-committing not to increase taxes on work and investment. Our 12.5% rate of corporation tax remains un-negotiable. And notwithstanding some media commentary in recent days, and as is open to the Government under the revised MoU with external partners, we remain committed to fulfilling the pledges made in the Programme for Government not to increase taxes on income and work by finding alternative deficit reduction measures that are less damaging to employment creation.

 

  • We are introducing a radical new National Internship Scheme.  This will give 5,000 people on the Live Register a chance to gain work experience and develop their skills.  We are asking employers all over the country - in public and private sectors - to participate in this major national campaign. There is an opportunity - and a responsibility - to provide internship places and help young people make the first step on the road to a full-time job. There will be further announcement on how employers can participate in this Initiative.

 

  • We are re-prioritising capital spending to focus on preventing a degradation of our existing infrastructure rather than building new infrastructure. This is not only more appropriate to our current economic circumstances but create additional jobs given the more labour-intensive nature of such investment activity.

 

  • We cutting the “Jobs’ Tax” on work for low-paid staff and spending on labour-intensive tourism-related services, such as hotels and restaurants. These measures will both improve our international competitiveness and help to shift domestic consumer spending away from imports towards domestic economic activity.

 

  • And given the fiscal constraints upon us, we are financing this initiative in a fair and economically efficient way. These pensions funds, the vast majority of which are invested in overseas assets, have been the beneficiaries of massive tax relief in recent decades. In our current circumstances, there is sound economic logic in clawing back some of the tax relief on capital invested overseas to finance greater domestic employment in Ireland. In this way, the Jobs Initiative is fiscally neutral but still represents a net stimulus into the Irish economy.

 

  • We are of course willing to examine measures to mitigate the impact of the pensions levy on employers running defined benefit pension schemes that do not currently meet required funding standards. But I must also say that the impact of the levy on pension schemes could also be at least partially ameliorated by a reduction in the administrative cost base of the pensions industry towards levels pertaining in the UK. This requires a dialogue between the pensions industry and their clients.