The Government is to announce fresh measures to boost jobs growth and tackle long-term unemployment in the Budget after new figures showed that the number of people at work rose by a record 95,000 people in the year to last April. The Budget will give job-creation measures a "further boost", the Taoiseach, Mr Ahern, said. He added that the new Central Statistics Office figures - which showed that the unemployment rate has dropped to 7.8 per cent - are the most significant evidence to date of the success of the Government's job-creation strategy.
The unemployment rate could now fall to 5 per cent within two years, according to the Tanaiste, Ms Harney, moving the Republic close to full employment. She also announced yesterday the creation of 1,400 news jobs in 50 new investment projects across the State.
Tomorrow's package will aim to further boost job creation by giving a significant income increase to lower-paid workers make it more lucrative for the unemployed to take work.
This will be achieved through a sizeable increase in personal tax allowances, which will substantially increase the amount of income exempted from tax, currently at £76 a week for a single employee.
The Government is also to signal a restructuring of the tax allowance system and to introduce immediate reforms in this area which will increase the income of lower-paid employees and encourage spouses of those in work to take up employment. The Budget will commence a move to a system of tax credits to replace the current allowances. This means standard cash deductions for all taxpayers. It is likely that from the next tax year, taxpayers will only be allowed to claim the PAYE allowance of £800 at the standard rate. As part of the change, the allowance may be increased to about £1,500, ensuring that the better off do not lose out from the move, but that lower paid taxpayers gain substantially. The Minister may also signal a similar change for other allowances, such as the main income-tax allowance. But a move on this scale would have to be introduced over a number of years.
New "social inclusion" measures will direct attention at urban unemployment blackspots and at old-age pensioners. A package on childcare is expected to include new reliefs to encourage the building of creches and their provision by employers and also a Government commitment to examine tax relief in this area. This is designed as the start of a strategy to help married women return to work.
The Taoiseach and the Tanaiste, both said that the Budget would give a further boost to job creation after the publication yesterday of the employment figures showing an unprecedented 95,000 rise to 1.494 million in the number of people at work in the year to last April.
The figures, published as part of the new quarterly household survey undertaken by the Central Statistics Office, show by far the highest jobs rise in any one year - the next best was a 60,000 increase in 1995. As a result, the numbers out of work fell by 32,000 to 126,600 in the year to last April, leading to a fall in the unemployment rate to 7.8 per cent, from 10.3 per cent a year earlier.
The economic boom has also led to the highest population in the history of the State due to the large-scale return of emigrants and foreigners coming to the Republic to work, according to separate Central Statistics Office estimates published yesterday.
The largest annual increase for almost 20 years has brought the population to 3.7 million in April 1998, up 44,300 or 1.2 per cent on April 1997. This is the highest figure since 1881, when 3.87 million people lived in the 26 counties that now make up the State.
Net immigration, at 22,800, is the highest in history. As the economy continues to outperform all its counterparts in the developed world there are also indications that the birth rate may be rising.
There were 21,400 more births than deaths in the year to April 1998 compared to a 19,500 difference in 1997. The number of immigrants has risen to 44,000, almost double the emigration figure of 21,200 in the 12 months to April 1988. The immigration figure matches the record high figure for last year while the emigration figure is the lowest since the CSO began publishing an emigration estimate in 1987.