Job Creation and Economic Growth
There will be no recovery without jobs being created. There are approximately 440,000 people on the live register. Of these 20% are under the age of 25 and a growing proportion are long term unemployed. It is expected that 40,000 people will emigrate within the next year.
Sinn Féin proposes a €7 billion investment package in job creation and economic growth over 3 years. We fund this from the remaining €5.3 billion in the National Pension Reserve Fund and €1.7 billionin funding from the European Investment Bank. The EIB will loan governments or the private sector up to 50% of a project’s funding if it meets their criteria of being a sound and sustainable project such as employment growth, climate change, environmental sustainability, energy, the knowledge economy and infrastructure. Ourproposals include such projects.
The average interest repayment to the EIB is less than the LIBOR rate which averages at 1.2% for five year borrowing and 2% for ten year borrowing, and they are willing to be flexible on repayment terms. They have received a directive from the EIB to actively seek out investments with states, where there is collateral, to meet the badly needed European investment drive. In 2011 the EIB had aninvestment fund of €75 billion, which is allocated to countries in accordance with their GDP share. Our total requirement from the EIB would be €1.7 billion over three years, which should be within our allocation.
The financial outworking of our €7 billion stimulus package is set out in the appendices of this document. The immediate focus of our strategy would be to expedite ‘shovel ready’ projects. Jobs estimates are based on the Construction Industry Federation and Department of Finance estimates of employment return of the order of 8,000 to 12,000 direct jobs per €1 billion invested. We would ringfence the return from our investment programme for the capital spending budget. Our total investment should see an average of 60,000 jobs created directly, with thousands more indirectly; and anything up to 96,000 jobs saved.
Furthermore, Sinn Fein would not cut capital spending. Fine Gael and Labour plan to cut capital spending by €750 million this year and make further cuts in future years. We would take this money and the €500 million the Government plans to spend on water metering and use it to begin fixing the state’s water system, including drainage to alleviate flood danger.
Our proposals would contribute to making Ireland more competitive as well as developing a sustainable, performing economy. Investment in infrastructure not only benefits job creation in the immediate term – it has supply side benefits for businesses and the state. A childcare system which caters for parents seeking to return to the workplace; an education system that allows for smaller class number and fosters young potential;a green energy system that provides for energy needs cheaply and efficiently; and a broadband service that meets the needs of modern Irish business. This is what our proposals will provide as well as creating jobs.
Investment in training and education
- Build 150 additional state run crèches. Cost: €335 million
Primary and Post Primary
- Build an additional 100 schools at a cost of €300 million and refurbish 75 more at a cost of €50 million over the next 3 years. Cost: €350 million
A Capital Stimulus Investment Programme
- Complete the regeneration projects in Limerick and Dublin. This will be a ten year project. Over the next three years the work will cost €960 million. We believe we can source approx. 21% of this funding, or €200 million from the EIB. Cost: €960 million
- Undertake an audit in the first 6 months of next year to ascertain the level of vacant housing stock and suitable NAMA properties available for social housing needs. Allocate €100 million for renovation of houses identified. Also initiate a social housing build of at least 5,000 houses in 2012, with a further 4,000 houses in the first half of 2013 at a total cost of €900 million. Cost: €1 billion
- Invest the €2.5 billion of capital investment necessary for the roll out of next-generation broadband access throughout the state. This will take Ireland to the top of the broadband league and will increase our attractiveness for high tech jobs. This is another project that we believe we can seek investment for from the EIB and we will aim for an investment of €1.1 billion, or 44%. Cost: €2.5 billion
- 50 new Primary Health Care Centres. Cost: €250 million
- Kick start the wind-power industry with a €600 million government investment in infrastructure plus a €400 million investment from the EIB. We will reform and reduce the lead in time necessary for projects and will mandate the ESB to develop an extra 300 MW of off shore wind generation in 5 years. It is estimated that this industry has the capacity to create 50,000 jobs over 15 years. Cost: €1 billion
- Sinn Féin will introduce a job retention scheme at a cost of €600 million to save up to 96,000 jobs in one year. Cost: €600 million
- Sinn Féin will develop a comprehensive and accessible internet data base based on the LinkedIn model but run by the government to allow business and job seekers connect to fill positions in real time. An e-training system will be integrated with this system to analyse employer needs, jobseeker needs and a system to deliver accredited courses over the internet. Cost: €5 million
Pension industry proposal
The Trade Union movement has put forward a policy with regard to the pensions industry and investment. This entails incentivising a percentage of the €78 billion industry to invest in Ireland. In exchange for such an investment, Sinn Féin would abolish the 0.6% levy on pension funds being applied by the current government (the .6% raises €470 million per annum). We are currently working on a proposal, which would entail a housing retrofit plan as outlined below. We do not include this proposal in our stimulus multiplier effect at the back of this document because it is a proposal in progress and the participation of the pension industry would have to be secured. From our initial contacts with the pension industry we believe the proposal is workable.
We would convene an expert group compiled of representatives of the pensions industry, relevant government departments, St Vincent de Paul, the construction industry, energy providers and Sustainable Energy Ireland to discuss the proposal below.
€5 billion investment project in retrofitting:
- There are 1.4 million houses in Ireland still in need of insulation retrofit. According to the Institute of International European Affairs approximately €14 billion of investment would be required to bring the residential housing stock up to an average Building Energy Rating (BER) of C1. This would save the average household €1,496 a year. It would also help Ireland reach its 20% energy efficiency target by 2020.
- Sinn Féin would facilitate the Private Pension Industry to invest €5 billion into a guaranteed and interest bearing Green Fund to operate initially over a 3 year period. This will retrofit over 500,000 houses, a third of the housing stock (cavity-wall insulation, attic insulation, high-efficiency boiler & heating controls, solar panel, windows and doors). It will create 50,000 jobs. Householders would continue to pay their electricity bills as normal for ten years, though within that period their bills would reduce as their houses were retrofitted. A portion of their bill would be paid to the Green Fund, repaying the cost of the retrofit. At the end of ten years, householders’ bills would reduce dramatically and their houses would be retrofitted.