The Government has announced a new €250 million Employment Subsidy Scheme to protect vulnerable jobs.
Announcing the initiative this morning, Tánaiste and Minister for Enterprise, Trade and Employment, Mary Coughlan, said the scheme is aimed at protecting up to 27,400 positions.
The Employment Subsidy Scheme will provide a subsidy of €9,100 per employee over 15 months to exporting companies in the manufacturing and internationally traded services sectors.
Companies seeking the subsidy must be judged as vulnerable in the current economic climate but viable in the medium to long term. Enterprise Ireland will be assessing firms as to their eligibility for the scheme.
The closing date for applications is September 4th.
“Not only will the scheme support the maintenance of vulnerable jobs, but it will help our economy retain its productive capacity and assist employers retain their labour, knowledge and skills-base, thereby supporting a faster return to sustainable growth,” said Ms Couglan.
The Tánaiste said the new scheme was in addition to the €100 million Enterprise Stabilisation Fund put in place by the Government earlier this year.
“Many of our exporting firms are experiencing great challenges in the current economic environment and the Government believes that unless additional innovative forms of support are provided, more jobs may be lost,” she said.
“In providing this support, the Government is optimistic that jobs will be saved and that vulnerable enterprises will benefit and will survive through the current challenging economic period. These firms will then be able to grow and develop and to provide essential jobs and investment in the recovery phase,” she added.
The initiative will provide a maximum subsidy of €200 per full-time employee per week for the first 26 weeks, reducing to €150, €100 and €50 respectively for each of the subsequent 13-week periods to a maximum of 15 months.
Under State Aid rules the maximum subsidy payable to any one firm, or group of related companies, for the duration of the scheme is €500,000.
The Small Firms Association (SFA) has welcomed the new scheme. It said the initiative would help exporters compete on a level playing field.
“These supports are desperately needed in order to allow our exporting companies to maintain their position in the international marketplace, where most other EU member states have already rolled out vast enterprise support packages, since the EU Commission temporarily raised the deminimis levels of state aid to deal with the crisis," said SFA director Patricia Callan.
"It will also go some way to supporting companies that trade extensively in the UK, where we have seen that government use a competitive devaluation of its currency to support its enterprises; something that is not possible within the euro zone," she added.
Employers' group Ibec also welcomed the new plan which it described as being a 'positive response from the Government,' at a difficult time for Irish firms.
"The scheme represents a significant part of a €1 billion allocation to job retention that Ibec believes is required to help national recovery. The scheme also recognises the great competitive difficulties companies have faced in recent months because of the strong euro," said the group's director Pat Delaney.
Isme offered a 'guarded' welcome to the intiative saying that while it wasx worthwhile it should form but one part of an overall strategy for employment maintenance.
We need an overall employment strategy that will tackle the negative factors impacting on the business sector, particularly excessive costs, late payments and lack of access to finance, which are directly leading to significant job losses. This should be complimented by employer PRSI reductions and other initiatives to maintain and increase employment," said Isme chief executive Mark Fielding.
However, Fine Gael was critical of the initiative which it said was rushed. The party's innovation spokeswoman Deirdre Clunes described the plan as "ineffective, expensive and riddled with holes."
