PRSI hope for firms as jobless toll soars
The Government is preparing a range of emergency measures -- including changes to the PRSI system -- to help employers stem job losses.
The strategies are designed to help firms cope with the cost of employment, as new figures revealed a record 1,500 workers a day are now joining dole queues.
Taoiseach Brian Cowen yesterday revealed 36,500 lost their jobs last month -- the highest increase since records began four decades ago.
Mr Cowen described the figures as "very alarming" and predicted more than 400,000 would be out of work by the end of the year.
The total number signing on the live register now stands at 327,900.
And economists last night predicted unemployment would climb to as high as 12pc by the end of the year.
The soaring unemployment figures will create a further dent in the Government's dwindling finances as it struggles to overcome a daily €55m deficit.
The cost to the Exchequer for each new person made unemployed, between social welfare payments and lost tax revenue, is €20,000 a year.
Finance Minister Brian Lenihan is currently working on a plan to give some form of assistance to businesses in danger of laying off workers. In particular, the PRSI system is being looked at as a means of supporting employers.
The Government is conscious of avoiding a breach of EU state-aid rules, so the assistance could be in the form of training grants. But government sources say the idea is to have an early-warning system in place at a local level to help firms in difficulty to retain their staff.
"It's about finding a mechanism. Rather than let the company or the staff numbers go down, could you help them to stay afloat," a source told the Irish Independent.
The Green Party's Minister John Gormley yesterday revealed the Government was teasing out a plan, in response to a call by the employers group, IBEC, for a PRSI respite.
"I can tell you we are working along those lines. That's all I can reveal for the moment. And I think what IBEC have suggested, yes, does make sense," he said on RTE's 'News At One'.
But a Finance Department spokesman last night insisted a plan was not yet finalised.
There were tense scenes in the Dail yesterday as Mr Cowen confirmed the full scale of the unemployment crisis.
Fine Gael leader Enda Kenny described the live register figures as "catastrophic".
"It is a long time since former Taoiseach Jack Lynch said that if unemployment went over 100,000, the Government should leave office," he said.
Labour's Eamon Gilmore said the additional 36,500 who lost their jobs in January would cost €730m in a full year.
"The Taoiseach is guilty of old-fashioned thinking in respect of squaring up the public finances in order that the economy will recover. That type of thinking belongs to yesterday. The US is taking a different approach -- the concentration is on addressing the question of getting the economy back on track and moving again," he said.
Tanaiste Mary Coughlan stressed the Government's overall plan is to sustain the public finances, banking and jobs, as well as helping those out of work.
She also announced FAS would provide an additional 51,000 places for unemployed people this year.
"These programmes will provide short training courses for job-changers or those who are recently unemployed," she said.
The number of job search assistance places also increased from 6,500 to 12,250 per year.
Mr Lenihan also told the Dail the Government was actively working to search out opportunities for job creation, to encourage exports, to assist consumers and the retail sector and to promote more vigorous price competition. The fruits of this work, in a special Cabinet group, would be announced in the next few months, he said.