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News : Irish Economy Last Updated: Feb 8, 2011 - 2:58 AM


Irish General Election 2011: Jobs galore on offer or maybe not
By Michael Hennigan, Founder and Editor of Finfacts
Feb 7, 2011 - 5:39 AM

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Fine Gael leader Enda Kenny, is called over to a car waiting in traffic in Galway City on Saturday, Feb 05, 2011, where he was campaigning for Fine Gael candidates.

Irish General Election 2011: The three main parties in the election are offering the prospects of jobs galore but that is always the easy part.

Politicians in government are good at making grand announcements but less impressive on the  follow-through. While we at Finfacts have said that the starting point of a credible jobs strategy should be an unvarnished assessment of the challenges, that would be too much to expect at election time when inconvenient truths are viewed as toxic!

What can be said, is that sustainable job creation in the domestic and exporting sectors is mainly dependent on economic recovery rather than government action.

Fine Gael frontbenchers Richard Bruton and Leo Varadkar have proposed a few interesting ideas which could help entrepreneurs, such as the feasibility of a single business tax for micro businesses (turnover less than €75k per annum) to replace all existing taxes.

However, the proposed Asia Strategy in the Working for Our Future(pdf) document, shows that Fine Gael shares similar delusions with Fianna Fáil and the Labour Party.

The document says the Asia Strategy 1999-2009 was a success. During this period, Irish goods exports to China increased fourteen-fold from €119m in 1999 to €1.6bn in 2009.

A Fine Gael government will direct the Department of Enterprise, Trade and Innovation to develop a new Asian Strategy for Trade from 2011-2025, with the aim of trebling bi-lateral trade during this period.

On Asian tourism, the document says that there is also huge potential for tourists coming from Asia to Ireland. If only 0.1% of the new Asian middle-class visited Ireland, that would mean 2m visitors a year.

Maybe, but the key issue of Irish-Asian trade is that it is overwhelmingly dominated by multinationals and usually decisions on destination are not made in Ireland.

Besides, total exports to China in 2009 were 2% of Irish exports. 

Fine Gael would invest €7bn from the National Pensions Reserve Fund and the sale of State assets, in water, broadband and energy, lowering business costs and improving competitiveness.

On youth unemployment, 45,000 placements including National Internship Programme places in private and voluntary sectors would be provided and Second Chance Education would be available for former retail & construction workers who did not complete their education. There would also be new opportunities for apprentices.

Over the next four years, Fine Gael’s Growth and Jobs Strategy will add on average 20,000 jobs each year, the party said.

Labour on Sunday proposed the establishment of a Strategic Investment Bank in two phases. During its initial phase Labour's Strategic Investment Bank will act as an investment vehicle to channel funds (approximately €2.8bn) from the National Pension Reserve Fund. It will focus on projects that will enhance infrastructure, boost growth and generate employment in the Irish economy. "It will channel much needed start-up and scale up finance to the SME sector. It will be fully independent and will follow international best practice commercial investment norms," Finance spokesperson Joan Burton said.

In phase two, as market conditions improve Labour's Strategic Investment Bank will develop into a functioning bank, taking deposits and raising long term financing. €2bn of the funds remaining in the National Pensions Reserve Fund will be allocated as capital for the bank and Labour said it believes that it should be an essential component of Ireland's re-structured banking system.

Fine Gael has ruled out establishing a new bank, saying that it had dropped a similar proposal because the State now owns or part-owns most of the Irish banks.

Minister of Finance Brian Lenihan said: "Bank of Ireland and AIB will be in a position to return to their correct role of supporting businesses and consumers in this economy. The State has already given substantial support to these two banks. As a result, we own most of the banking system. What sense does it make for any government to set up yet another State-owned bank to compete with these two banks for funding and customers?”

Last month, Labour announced an enterprise policy that proposes some enhancements to Fianna Fáil's existing policies in this area.

Fianna Fáil will publish its manifesto today and on Sunday,  Fianna Fáil leader Micheál Martin announced an agri-food plan with the objective of increasing the value added in the agri-food, fisheries and wood products sector by €3bn, representing  a 40% increase compared to 2008.

The plan has an export target of €12bn for the sector, representing a 42% increase compared to the 2007-2009 average.

The Finfacts reality check on Jobs: Irish General Election 2011: The challenge of creating 200,000 new jobs and the media as cheerleader

Finfacts article on food, Sept 2009: Ireland: A "smart" economy in food better than pie-in-the-sky aspirations?

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