Employment plan is good, but where will money come from?

THE Green’s policy document on employment creation in the coming years involves “playing to our strengths” in economic areas where Ireland has a competitive advantage.

The document pinpoints some exciting new areas for state investment which may well be sustainable and will definitely will be green. The Green Party is to be commended on this work. However, the projections for jobs are often wildly optimistic and at times inconsistent.

The party plans to retrofit 100,000 houses a year from now until 2020 to make them more energy efficient. This will cost €500 million which will come from the National Pension Reserve Fund. This stimulus is an excellent idea. The fact that this will produce thousands of jobs; will reduce energy costs for consumers and will curb greenhouse gas emissions in the environment, are all excellent results.

However, it seems that the cost of doing this is underestimated: the policy document states that the Greens in government have invested €100m in retrofitting 50,000 houses. This implies that to retrofit 100,000 houses would cost €200m. To do this over the 10 years to 2020 inclusive at 100,000 houses per year would imply a cost of €2 billion.

Consequently, on the basis of their time in government, the €500m investment would retrofit 250,000 houses. It would not retrofit 1 million houses as the Greens suggest. The number of jobs at 25,000 is correct.

The Greens plan to create 5,000 jobs for the planting of 15,000 hectares of forestry. This again is laudable, having strong economic and environmental benefits. Yet the figures seem contradictory. The Green’s executive summary cites 5,000 jobs, yet the larger policy document puts the jobs dividend at 500. This document refers to extra “downstream employment” but this would not multiply to 5,000. There is a reference to 8,000 bioenergy production jobs by 2020, but no resources are committed, so it’s unclear how these would happen.

The plan envisages the creation of a high speed laser broadband network which is called the Exemplar Network and that this will create 5,000 jobs. It doesn’t commit public money to this and seems to expect the investment to come from the private sector. Yet the plan envisages huge efficiencies and cost savings for the government’s public information service.

The plan envisages 28,000 jobs in cloud computing and data centres which will be energy efficient. The plan hopes that foreign direct investment will fund the latter and it will create 10,000 jobs. However, one wonders where the finance will come from to make Ireland the “European capital of cloud computing” which it is envisaged will generate €9.5bn and a further 18,000 jobs by 2014.

The suggestion that an investment of €70m in Web Active ICT training for unemployed people will create 20,000 jobs is hard to believe, notwithstanding that the provision of training here is a very good idea. Likewise, there is no extra money to provide for the International Content Services Centre in Dublin which it says will provide 10,000 jobs.

Overall, the plan does not commit any extra spending apart from €500m for retrofitting. Given that these are new areas which haven’t been included in state spending prior to now, it is almost impossible for these to be provided for from existing or future spending unless the money is taken from something else.

This is a stimulus plan which would probably cost at least €4bn. The plan is good but the Greens don’t know where the money will come from to fund it.

Tom O’Connor is a lecturer in Economics & Public Policy at CIT