Memo:From: IBEC. "Job Creation = Government Revenue"

This week, the Department of Finance released their 'Mid-Term Fiscal Policy Statement'. It stated our economic growth is not going to be as steadfast as public prayers had originally hoped.  According to Irish Financial News platform FinFacts, the burden of international debt interest will have an inevitable knock-on effect for our unemployment rate. 

In a recent Irish Times article senior economist Reetta Suonperä from the Irish Business and Employers Confederation (IBEC) explains how we have a dual growth measurement structure in our labour market at present. According to Suonperä “tackling unemployment is the key challenge facing Government, and this needs to be reflected in the measures taken in Budget 2013”.  Our ever-expanding high-skilled export driven sectors are almost single handedly maintaining our economic growth. However, it is our ever-decreasing domestic sectors that are in need of a shake-up in order to promote sustainability in the future.IBEC has made a number of pre-budget recommendations to the government aimed at generating revenue from within. Taken directly from their policy document Unlocking Domestic Demand - Initiatives to Support Ireland's Domestic Economy' (IBEC, Nov. 2011) the following three proposals can be seen above in the info-graphic. 1. Create opportunities to help people purchase a home. 2. Offer financial incentives to home-owners for renovation work (on the backdrop of a strategic plan to focus on the transition of the informal construction industry to the formal construction industry), 3. Introduce an electronic social welfare payment card that promotes spending on domestic products. Additional  recommendations relate to property market taxation, consumer spending, accessible pension schemes and credit service support. 

Image Source: FinFacts.ie

In the wake of proposals to hike PRSI and sick pay costs for employers, IBEC are quick to highlight that these measures could cause unemployment to rise - not decline. As seen in the bar chart illustration above the OECD Taxing Wages Database shows we have the highest marginal tax rates on average earnings amongst countries such as Austrailia, Canada, the UK and the U.S. If we promote employability through supporting employers, IBEC reckon that we will start to see sectors such as medical devices, telecoms and pharmaceuticals spear-heading new hires the Irish job market in 2014. 

Click here for full IBEC Irish Times article (Laura Slattery) Nov. 14th 2012

Click here for article on FinFacts.ie. Nov. 14th 2012.
Click here for Dept. of Finance pdf version of Mid-Term Fiscal Policy Statement.
Click here to be brought to free info-graphic resource tool website, easel.ly