Thursday, April 26, 2007

Irish General Election 2007: Plan for 250,000 new jobs but don't ask for specifics

Micheál Martin TD, Minister for Enterprise, Trade & Employment
I generally give press briefings a miss as they are a poor use of time.

Last week, the opportunity to challenge a soundbite at the Fianna Fáil press conference to launch the document Keeping Ireland Working - The Next Steps Forward, was too much to miss.

The plan, which was launched by Enterprise Minister Micheál Martin and Finance Minister Brian Cowen, set out a series of initiatives designed to support firms to grow and workers to take higher-paying jobs.

In 1997, the former Progressive Democrats leader Mary Harney said that if it isn't possible to distil a position on an issue into a soundbite, it isn't worth saying.

A favourite of Martin's in recent months has been the statistic that 86,000 jobs were created in the Irish economy in 2006 and I was irritated listening to it from the horse's mouth and many partisan parrots, without any journalist challenging him.

The Central Bank was launching its quarterly bulletin on the same morning and it appeared that the beat of most of the journalists present at the press briefing, was politics rather than economics.

Cowen's claim that Labour Party Leader Pat Rabbitte could not be trusted to defend the 12.5% corporation tax rate from European Commission busybodies bent on harmonisation, got a lot of airing but the central point in the policy document was that 250,000 jobs would be created over the next 5 years.

I had glanced through the document and I said to Enterprise Minister Micheál Martin that most of the initiatives outlined were laudable but in terms of impact on economic activity, it would be minimal.

A world-class knowledge economy in five years with many of the existing Irish tech companies struggling?

Referring to the baseline year 2006, which was an excellent period for economic growth in Ireland and in the global economy, only 6,000 jobs of the total of 86,000 that were created in 2006, were in the tradable goods/service sectors of the economy and I asked for comparable figures for the coming 5 years.

Given the limited size of the indigenous tech sector with no firm having annual revenues of more than $100 million and the fact that 92% of exports are made by foreign firms, I said that it looks that our strong dependence on foreign firms for growth will continue. However, in 2006, Irish exports only increased in US dollar terms by 3%, the lowest of the top 30 of the world's exporters. So, the challenges for the foreign-owned sector are also high.

In total 86,000 jobs were created in 2006, according to the CSO. The strong growth in the Construction (+28,400) and the Health (+18,700) sectors accounted for just over 55% of the annual increase in the numbers employed. Only 6,000 jobs were created in the tradable goods/services sector of the economy, according to policy advisory agency Forfás. It had reported in January 2007 that 83,000 jobs were created in 2006.

Martin waffled about job creation and did not provide any figures for the next five years to match the 6,000 jobs in 2006. When he queried my figures, I told him that the figures were published by his own Department's agency Forfás in January 2007.

When Finance Minister Brian Cowen summed up, he said, while looking at me, that jobs other than ones in manufacturing were also important. I interjected to say that my total of 6,000 covered all jobs support by the State enterprise agencies.

"I know that," Cowen snapped and there it was - a global figure of 250,000 and neither of the two ministers could or would provide a sectoral breakdown.

No doubt that we will hear about the 86,000 jobs again and as Mary Harney might also say, the key thing about a soundbite is to keep repeating it .