JOBS, jobs, jobs were declared as the three biggest priorities by the current government parties when seeking election and, immediately on coming into power over four and a half years ago, they set up a special department to concentrate on job creation. Even though things got worse before they got better, the government ultimately did a good job on addressing the issue with Minister for Jobs, Enterprise and Innovation Richard Bruton’s Action Plan for Jobs regularly exceeding targets which many – ourselves included, we have to admit – thought to be over-ambitious when announced.
With his mantra being that ‘governments don’t create jobs, they create the conditions within which jobs can be created,’ Minister Bruton introduced a systematic multi-agency approach of going about his task. Sector by sector, they looked at how to unlock the potential for job creation – the reduction of the VAT rate for tourism-related products and services to 9% being the catalyst for one of their earliest successes – and set realistic targets which they were able to measure and, more importantly, achieve in most cases ahead of schedule.
As a result, the unemployment rate has come down from a high of 15.1% to its current rate of 8.9%. This has been helped by a number of external factors, the biggest in the past year being the quantitative easing introduced by the European Central Bank, which has also kept its interest rates down the nearly nothing.
From Ireland’s point of view, the most significant bonus that quantitative easing has brought about is that it has weakened the euro on the currency markets against the US dollar and the pound sterling, making our exports a lot more attractive, pricewise, to the UK and USA and also offering great value to tourists visiting here from outside the euro zone. With our export trade soaring and driving economic growth at a much faster pace than other European countries, now is certainly the time to maximise job creation potential, but the jobs need to be across all sectors and sustainable.
Big job creation announcements, such as last week’s by Apple of one thousand extra jobs for Ireland, are certainly most welcome, but there is no sentiment when it comes to the workings of big multi-national corporations and, if something goes awry for them, such as a country’s tax regime becoming less favourable, they are quite likely to move on to greener pastures. We must also remember that, at some stage, the euro will strengthen against other major currencies and this could have a knock-on adverse effect on exports and possibly jobs.
In the meantime, however, the government must obviously continue to fully exploit the advantageous position the country currently finds itself in and the initial part of its new ten-year Enterprise 2025 plan is to provide the conditions to create 221,300 additional jobs over the next five years with more to come in the following five. Given their track record at creating jobs, we probably should not be doubting their optimism – firstly, that they will still be in government to see it through and, secondly, that the our current economic trajectory is not knocked off course by external factors outside of their control, as could quite easily happen.
There also needs to be more of a concentration on promoting local enterprise in rural areas that don’t tend to benefit from the big multi-nationals’ jobs announcements. The conditions that Minister Bruton needs to see created for this to work include better broadband connectivity, speedier access to credit and controlling of business costs, especially those imposed by State agencies and local authorities.
The government’s commendable work on job creation, with the wind firmly at its back, sees the Jobs Department, and all the agencies it has involved, working within a comfort zone, so they are going to drive on harder than ever now, especially with a general election in the offing. However, the government should also be looking to apply a similar type of formula to other sectors that are now in more urgent need of attention, especially housing and health.
We already have a Department of Health that needs a radical overhaul and Minister Leo Varadkar needs to expedite this with greater urgency. A dedicated Department of Housing needs to be set up by the next government to try to emulate the job creation success and endeavour to sort out the shortage of social housing in particular, which has reached crisis proportions, and to reduce the high incidence of homelessness as far as can possibly be done.