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Tuesday 28 March 2017

No extra money available to pay for jobs initiative

Donal O'Donovan and Ann-Maire Walsh

There will be no extra money to pay for next month's 'jobs initiative', it was revealed in last night's budgetary update by the Department of Finance.

"The package of measures to be announced as part of the jobs initiative must be budgetary neutral in the overall context," the report said.

The Government plans to publish details of the new initiative by the end of next month.

However, yesterday's statement will cast fresh doubts over its ability to deliver meaningful jobs growth through the much-hyped scheme.

It means funds to back the jobs plan have to come from new taxes, new cuts, or the sale of state assets.

In the Programme for Government, the Coalition promised resources for an additional 15,000 places in training, work experience and education for the unemployed.

Serious efforts to sell off assets like the ESB and Bord Gais have already taken a knock this month after the McCarthy Report revealed that prices for most semi-states would be too low to justify privatisations.

The latest official update on the state of the economy revealed that growth would be more than 50pc lower than forecast in 2011 and said there was no new money available to finance jobs creation schemes.

The jobs initiative has already been downgraded from a planned 'jobs budget'.

As recently as this month, Enterprise Minister Richard Bruton said the Government remained on target to make the announcement before the end of May.

He previously said the initiative would include cutting employers' PRSI and the VAT rate, but it is now clear that can only happen if equal savings are found elsewhere. That means cutbacks in the budgets of other ministers.

Projection

The document shows that the Government expects job losses to continue for the time being and fall only slowly in the coming years, remaining stubbornly high until at least 2015.

The latest projection is for unemployment to peak at 14.4pc this year and still be at 10pc in 2015.

Wages are expected to fall further in 2011, picking up slowly as joblessness decreases.

Meanwhile, the Government last night submitted final figures on the public sector pay and pensions bill to the IMF. While it refused to give details of the final figure, sources said that the public sector workforce has been cut by up to 3,000 since the start of the year.

It must reduce the payroll by €309m this year, under the four-year recovery plan, and a total of €1.2bn by 2014.

Sources have revealed that the figures will show that the public sector 300,000-strong workforce has been cut by between 2,500 and 3,000 since the start of the year.

Staffing numbers in local authorities have also fallen by 6,600 in just two years. The Department of the Environment said yesterday that the numbers of people working in the State's 34 city and county councils have fallen by 20pc since 2008 because of the ban on hiring new staff, an early retirement scheme and non-renewal of contracts.

Environment Minister Phil Hogan has ordered a high-level group to find savings in local authorities as part of a major reform of local government.

The Local Government Efficiency Implementation Group has been ordered to examine ways to cuts millions of euro from day-to-day spending as part of measures to streamline the sector.

The group, chaired by Pat McLoughlin from the Irish Payments Services Organisation, has been asked to recommend ways in which councils can share services including human resources and auditing, and set up a system so they can buy goods and services in bulk.

Irish Independent

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