The basic objective of the premium employment programme is to get as many disemployed workers restored to employment as quickly as possible. The State pays a subsidy of £15 per week to an employer for additional unemployed workers taken on over and above the number employed as at 20th June, 1975. It is a condition of the scheme that the unemployed worker must have received unemployment benefit at least once since June, 1974, and was signing-on at an employment exchange or attending an AnCO training centre for at least the four weeks prior to being re-employed.
With the co-operation of employers, thousands of people can be returned to gainful employment by means of the extended premium employment programme. I would ask all personnel managers and production planners to consider seriously the advantages which lie in PEP.
I have directed all manpower offices throughout the country to contact local employers to examine afresh the steps by which the premium employment programme may at the new rates, with co-operation from employers, succeed in reducing local unemployment.
Trades councils and chambers of commerce may assist by informing their affiliated members and organisations of the advantages of the programme. While I am especially anxious that the premium should be availed of by those industries most seriously affected by the recession— textiles, footwear and engineering— PEP can also assist such relatively new industries as pharmaceuticals, electronics and petrochemical activities which are still in their growth stages.
By providing an incentive to employers to increase their work force now, ahead of requirements, we can be better placed to expand production quickly. There is some evidence that the level of stocks in some of our industries has now been reduced to a level consistent with the slowdown in overall demand. We should not allow this situation to persist for so long that we are unable to meet the initial surge of demand which will surely come.
The programme will make it easier for the employee to get a job again and for the employer to offer the employment. For the employer who is delaying taking on workers until he sees further positive signs of an upturn in the economy, PEP, by reducing the cost of taking on new workers, gives him a substantial inducement to do so now. In previous recessions here unemployment has tended to last longer than necessary because employers traditionally have met improvements in demand after a recession by increasing the overtime available to existing staff instead of taking on new workers. In present circumstances this could be a short-sighted and expensive practice. The programme enables employers to take on workers now in anticipation of the improvement already evident in certain of the major economies.
The prospects for international recovery are brighter now than at any time for the last two years. The major economies such as the United States, Germany and Japan are growing at increasingly faster rates. There are signs also of a new level of international co-operation in the management of the world economy. Agreements reached on planned growth in the OECD and EEC areas suggest that the recovery can be sustained without a recurrence of extreme inflationary pressures though of course it must be noted in this connection that the 5 per cent rate agreed at the meeting would not settle our unemployment problems in the years ahead even if those targets were achieved fully. In the EEC it has been agreed that a growth rate of 5 per cent per annum should be targeted for with the objective of reaching a satisfactory level of employment by 1980.
In Ireland, unemployment seasonally adjusted has stabilised during the second quarter of this year. In absolute terms the numbers on the live register have dropped by about 9,000. This pattern is in contrast to that prevailing in Northern Ireland and Great Britain where unemployment continues to rise. This would seem to confirm that the pattern of unemployment here is more closely related to that in the EEC rather than Britain which was traditionally the case. Of course it is essential if we are to maintain this more hopeful tendency of our economy that our industrial costs must be held at levels which will facilitate a significant and early reduction of present unemployment.
The total number of workers who have been re-employed to date under the programme is over 5,000. The vast majority of these workers were re-employed in manufacturing industry including 2,000 in textiles. I am encouraged by the fact that these workers might otherwise be still without a job but for the operation of the scheme.
I must say, however, that I am far from satisfied about the extent to which the scheme has been used up to now. However, with growing evidence that there is now a prospect of a recovery in the economy, there should be a greater incentive for employers to take on additional workers in the expectation that the level of demand both in the domestic and export markets will increase. A survey which was taken in May showed that the recovery in economic activity had in the main continued. The level of exports had continued to improve and over the next few months the forecast was that production would continue to increase as would exports. Home sales were expected to remain stable.
It is imperative that we should capitalise to the greatest extent possible on any opportunities to take up the slack in our productive capacity and thereby reduce unemployment. The Government, as an earnest of their determination to take postive action to help those who are without jobs, have decided to seek the approval of the Oireachtas to extend the duration of the premium employment programme schemes until the end of the year. Under the programme, two separate schemes were launched—one for certain manufacturing industries and the other for agriculture. The currency of both schemes expired on 26th June, 1976.
As announced in my speech on 26th May, 1976, on the Estimate for my Department, I propose to extend the duration of both schemes for a further six months. The purpose of the amending legislation, as indicated in section 1 of the Bill before the House, is to obtain statutory authority for the proposed extension. The proposed new termination date referred to in the Bill —8th January, 1977—was adopted so as to coincide with the four-week payment cycle up to the end of December, 1976. The reason for prescribing the commencement date—26th June, 1976 —in section 2 of the Bill is to preserve the continuity of the schemes from the previous termination date, as prescribed in the 1975 Act, up to the new termination date on 8th January next.
During the past year certain modifications have been made in the original programme. For instance, the scope of the programme for manufacturing industries was extended to include food processing, which had been excluded initially, with effect from 5th December, 1975, after the seasonal peak in that industry had passed because, again, the programme was not designed to simply supplement a seasonal upturn in extra jobs. It was intended to bring fresh, permanent jobs into the industries designed to be helped.
In addition, the premium rates were improved. Initially, the premium rate per worker was fixed at £12 per week up to 3rd April, 1976, after which it was to be reduced to £6 per week for the period 4th April, 1976, to 26th June, 1976. As I have already announced, the amount of the premium has been raised to £15 per week with effect from 4th April, 1976, instead of being reduced to £6 as originally envisaged. The second-phase rate, which has been increased from £6 per week to £7.50, will now apply from 19th September, 1976.
While the increase in the amount of the weekly premium to £15 should help to make the programme more attractive, I have also arranged, in addition to a publicity campaign in the newspapers, for the National Manpower Service of my Department and for the training authority, through its advisers, to undertake an intensive canvass of employers to again bring to their notice details of the programme and to encourage them to take advantage of it over the next six months. I also arranged to have employers in manufacturing industry circularised by post about the improvements and extension of the programme. These promotion drives should produce a renewed interest in the programme, which, I believe will lead to a further increase in the numbers returned to work.
Expenditure approved to date under the programme is approaching £750,000. Because of the higher rate of premium now applicable and in anticipation of an increase in the volume of payments, the provision of £1.25 million in my Department's Vote for the current year may be inadequate. If it is, I shall be happy to introduce a Supplementary Estimate before the end of the present year to meet the extra financial commitments involved, because it will be sure evidence of the effectiveness of the programme.
The Government's strategy for 1976 was to give priority to expenditure that would promote growth and sustain or increase employment. The premium employment programme is one consequence of that strategy. One of the programme's attractions is that its effects are immediate inasmuch as people are immediately restored to gainful employment as a result of the programme.
Senators will note that the Bill provides for retrospection of the programme to 26th June, 1976, on which date the original programme expired. I am anxious to avoid any interruption of payments to employers which might be occasioned by possible delay in enacting the new legislation. For that reason, I would urge the House to give this measure a speedy passage.
I commend the Bill to the House.