Dáil Éireann - Volume 356 - 27 February, 1985

Ceisteanna—Questions. Oral Answers. - Private Sector Job Creation.

2. Mr. S. Brennan asked the Minister for Finance, if he will indicate the implied annual rate of job creation in the private services sector in the period covered by the national plan; and the comparable average figure for that period 1982-84.

Minister for Finance (Mr. Dukes): Data on job creation in the private services sector are not available. Table 1-2 of Chapter 1 of the plan Building on Reality indicates that net employment in private sector services is expected to increase by 22,000 between mid-April 1984 and mid-April 1987 excluding the growth in employment arising under existing special employment schemes and the effect of new schemes. The implied annual average rate of increase is just over 7,000 a year. The comparable average increase in the period mid-April 1982 to mid-April 1984, when recessionary [909] conditions prevailed, was about 4,500 a year.

Mr. S. Brennan: Does the Minister really think that 7,000 new service jobs per annum between now and 1987 is realistic considering the figure he has just given, that the figure achieved in a similar period was 4,500 per annum? Is it realistic to say that the Government are proposing to double the number of service jobs created in the three years ahead when looking behind us we only produced 4,500 jobs per annum? Which service areas that were not there in the previous three years does the Minister see giving the extra jobs?

Mr. Dukes: The figures are realistic if we take the annual average increase mid-April to mid-April in private service employment. For the period 1981 to 1985 the annual average increase was 6,300. For 1982 to 1984, when we had the severe recession conditions, the annual average was 4,500. We are projecting an annual average increase of 7,300 over the period 1984 to 1987. We could possibly expect that the increase might be a little larger than that and indeed more optimistic projections have been made. In The Way Forward published in October 1982 it was projected that employment in this category would increase by 9,750 per annum——

Mr. O'Kennedy: That was before your budgets.

Mr. Dukes: ——on average between 1983 and 1987. On the other hand, another relevant consideration is the fact that in the two years 1983 and 1984, when private services output increased by only 1 per cent, employment rose by 2½ per cent, implying that productivity over that period actually declined. We have made our forecasts in the expectation that productivity would remain at its present level. We would come out then with a figure of just over 7,000 per annum.

Mr. O'Kennedy: Does the Minister say it is realistic, having regard to the impact [910] of the budget and Government policies, to project almost twice as much an increase in employment in the service sector in the years ahead as has been achieved in the last two years? Is not that flying in the face of the reality on which the Government pretend to build?

Mr. Dukes: No. There are one or two factors which might lead one to believe that the growth in employment would actually be slightly larger than what we have projected. I would also point out that these projections were prepared before this year's budget was put together and brought into this House and the effect of the VAT and other changes in this year's budget would be to improve the prospects.

Mr. Lenihan: Would the Minister agree that an extension of the venture capital incentives in regard to manufacturing industry to the service industry would be a practical way to achieve the targets that the Minister has in mind which cannot be achieved unless some incentive is introduced?

Mr. Dukes: Strictly speaking that is a separate question as it has to do with the reason why the venture capital scheme takes the form it does. We have improved the situation in relation to certain services over the last two years, particularly computer services, but the projection of the increase of just over 7,000 per annum was drawn up at a time when we had already brought in the venture capital scheme. For reasons which are not directly relevant to this question but which I know we will have an opportunity to discuss when we get on to the Finance Bill, I would not favour an extension of the venture capital scheme to the services area.

Mr. R. Burke: The Minister gave the period mid-1984 to mid-1987. We are now coming towards ——

Mr. Dukes: I said mid-April.

Mr. R. Burke: Could the Minister tell [911] us are we on target for this year from mid-April 1984 to mid-April 1985?

Mr. Dukes: I would not yet have the data that would allow me to give an answer to the Deputy. It would be much later in the year before we would have the data on the employment, but I am confident that we will reach the target.

Mr. R. Burke: The Minister said that there were more optimistic assessments than the 7,000. Surely the Minister will be aware of the figure in the service industry in view of the fact that, with unemployment standing at 234,000, he would be aware that the jobs he expects are just not appearing in the service industry.

Mr. Dukes: I do not accept that.