Madam, – I agree completely with Jody Wheatley (September 3rd) that the Employment Subsidy Scheme introduced by the Tánaiste has not been properly thought out.
I have contacted the Office of the Tánaiste regarding the qualification criteria that a company must generate at least 30 per cent of its turnover from exports. I was advised that this is because there are a limited number of jobs that can be supported under this scheme and that to support all enterprises operating in Ireland could have serious displacement consequences. The scheme should not subsidise one Irish job at the expense of another Irish job.
This logic is flawed in several ways. First, this is an employment subsidy scheme, not a job creation scheme. The objective is to allow qualifying companies to retain current staff numbers and not to recruit new employees. Therefore, there is no risk of displacement from other competing companies. Second, if this scheme was genuinely concerned with export companies, the qualifying level would be closer to 100 per cent than 30 per cent. Companies which export 30 per cent of their material retain 70 per cent for the home market.Therefore 70 per cent of the subsidy will effectively be targeted at the home market. This will in effect create the problem the Tánaiste is hoping to avoid. A genuine company that exports 25 per cent of its produce will suffer a competitive disadvantage against a similar company which exports 30 per cent.
I accept that a limited number of jobs can be supported, but this is clearly not enough. Both Ictu and Ibec have asked for a comprehensive package to support jobs.
I would ask the Tánaiste and the department to look at removing the 30 per cent qualifying criteria and allow genuine companies such as ourselves, who qualify in all other respects, the opportunity to continue as a significant employer and contribute to the medium term growth of the Irish economy. – Yours, etc,