2013 begins with news that An Taoiseach Enda Kenny is to convene a special Cabinet meeting in January 2013 which will be devoted to jobs. Is this just political bluster like the ministerial scorecards announced last Christmas or is this a serious effort to tackle the 14.6% unemployment rate equating to 324,000 unemployed and 420,000 in receipt of all unemployment-related benefits? Difficult to say, but there has been less than impressive progress made in delivering Point One of the famous Five Point Plan* which was trumpeted during the 2011 General Election and put job creation to the forefront of the new government’s plans.
Having watched the deliberate cutbacks in the capital budget from September 2012 onwards so as to shore up overruns in other government spending, and having seen ministers repeatedly deny there was any plan to cut the capital budget and that it would be spent by the end of the year – which it wasn’t – and incredibly, to hear one of the most senior ministers in Government and a member of the four-man Economic Management Council blithely state that jobs don’t feature when planning for capital expenditure, the view on here is skeptical and this looks like another bout of New Year’s optics for the masses.
But on the off-chance that Enda Kenny is indeed serious about jobs, here are four little suggestions that won’t cost him a cent but may create or protect a few thousand, perhaps even low 10s of thousands of jobs in 2013.
1. This year, in contrast to last year, ensure the capital budget is actually spent – last year the planned budget was underspent to the tune of €405m at the end of November 2012, and it is clear that spending was held back to compensate for current spending overruns, particularly in Minister James Reilly’s Department of Health
2. Tell his ministers that when phasing the capital budget in 2013 that job creation be “bumped up” the priority list. “Phasing” means breaking down the €3.4bn annual planned spending for capital into individual months, Jan, Feb, Mar, etc. Minister for Public Expenditure and Reform, Brendan Howlin shamelessly says that jobs are not a consideration when phasing the capital budget over the 12 months of the year – “Job creation is not a factor in the profiling exercise.”
3. Further to the staff report by the IMF in December 2012 which stated that NAMA was back-loading its €2bn announced investment to the end of the four year period ending in 2016, issue a Direction to NAMA under the NAMA Act reminding NAMA, as Minister Noonan did when he Directed NAMA to temporarily pay the Anglo promissory note last March 2012, that NAMA has an obligation to the wider economy, and Direct NAMA to frontload the investment, subject only to NAMA investing in projects which will cover the NAMA cost of capital which is presently just over 0.75% per annum.
4. Stop creating property millionaires by paying colossal premiums to private land owners for land acquired for development of national infrastructure. The Kenny Report published in 1974 and written by Judge Kenny called for public acquisition of land to set prices capped at 125% of the land’s existing use value. In other words, stop paying farmers €150,000 an acre for land that is otherwise worth €7-15,000 an acre with its agricultural use. Use savings for valued added development of the national infrastructure which will lead to richer job creation and cheaper and better infrastructure.
The above four suggestions should not cost this State a cent. They merely monitor existing plans and put jobs at the forefront of spending, and in the case of NAMA, the Direction is consistent with the NAMA Act and the overall purpose of NAMA and indeed NAMA’s overall plan to spend €2bn on development of its portfolio, and in the case of the Kenny Report recommendation, both Labour and Fine Gael have previously embraced the recommendation, so all that is required is to give effect to it through legislation.
Somehow though, I expect there’ll just be the meeting in January…
*“Point One – Protecting and creating jobs. Because jobs and opportunity are the best chance of keeping our best asset – our young people – at home. We plan to create 20,000 new jobs a year over the next four years. How? By cutting employers’ PRSI, by creating a welfare system that encourages work and by investing an extra €7 billion from State pension funds and from the strategic sale of state assets into developing the key infrastructures that will make our economy competitive for the future. In doing so, we can, by 2016, make Ireland the best small country in the world in which to do business” Fine Gael’s Five Point plan promoted during General Election 2011