Job search

“Where do jobs come from?” is a simple question with a more difficult answer.

All agree that Ireland desperately needs more jobs to become available. But how does this eventuality come about?

One needs to investigate where wealth comes from, and the answer is always the private sector – which then pays for the public sector.

Similarly, both business and trade unions have laid out proposals to create jobs – with both agreeing that a major jobs boost is needed – but disagreeing on how best to do it.

Unfortunately, the trade union approach is to create organisations that will be labour intensive.

Chambers’ approach is to grow businesses.

Which one do you think will actually create sustainable jobs? Which one is a job purchasing scheme?

Specifically, Chambers Ireland want help for smaller business who can then hire more staff while the Irish Congress of Trade Unions has called for investment in up-skilling the workforce and big spending on big-ticket infrastructural projects such as water and broadband.

Thousands of jobs could be created if the Government were to make a number of small changes to the VAT system, PRSI rebate scheme and stamp duty rate, according to Dublin Chamber of Commerce.

“At the top of the agenda for economic recovery is the fostering of enterprise and the creation of jobs. Small and medium sized enterprises (SMEs) are a central component of the ‘jobs initiative’. These businesses can be helped to survive and grow by tax changes which improve credit flow – changes that will increase Exchequer receipts as these firms expand and generate employment,” said Gina Quin, Dublin Chamber chief executive.

She said that an increase in the VAT threshold could help small and medium firms improve their cashflow situation dramatically.

“Cash flow has remained a significant problem for many businesses,” said Ms Quin. “By shifting the payment of VAT until cash is received, the burden on a small business’s cash flow will be reduced. This will then allow them to put more focus on growing their business rather than worrying how they will pay the tax man,” she said.

Dublin Chamber is recommending that the cash accounting scheme be extended to businesses from E1m to E2.5m. This would allow more companies to pay VAT when they receive payment.

Since 2010, the Employer Job (PRSI) Incentive Scheme has had a very poor uptake with only 1247 employees being hired to-date. The scheme exempts employers from paying the employer PRSI contribution for certain employees for 12 months.

Despite the 2008 reduction from 9pc, Ireland’s rate of stamp duty is well above the UK’s Stamp Duty Land Tax, which varies from 0pc to 4pc. “Stamp Duty represents the highest proportion of the transaction cost for commercial property and serves as a significant deterrent to property transactions,” said Ms Quin.

Dublin Chamber recommends reducing the rate by four percentage points in order to significantly boost transaction activity.

On the other hand, the Irish Congress of Trade Unions (ICTU) has submitted new job creation proposals to Government that would see a major investment in up-skilling the workforce and big-ticket semi-State projects.

It wants an overhaul of the national skills and training system, investment in key infrastructural projects to build competitiveness and the harnessing of semi-state expertise to aid job creation and growth.

Congress General Secretary David Begg said growth in domestic demand is essential to job creation.

“To get growth we need investment and therefore our proposals are more urgent and relevant, now more than ever.”

 The skills initiatives are outlined in a new Congress report: A New Skills Policy for a New Economy.

The Congress job creation proposals submitted to Government also envisage harnessing the expertise and resources of the semi-states in the delivery of “labour intensive infrastructural projects”.

According to Congress General Secretary David Begg this would be “the best way of getting early results on employment” particularly as semi-state companies have the capacity to finance projects themselves.

The Congress proposals envisage semi-state involvement in ‘big ticket’ projects such as a national Water and Waste system and delivery of a Next Generation Broadband system across the country, which could greatly assist Ireland’s competitiveness.

Congress has also urged the use of Labour and Social Clauses in all public contracts, with the specific aim of maximising the “employment and skills impact” of such projects.

Roger Brownlie for Vistage Ireland