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Jan 21, 2009

Jobless now exceed 300,000 as Superquinn latest to cut staff

THE NUMBER of unemployed now exceeds 300,000 and hundreds of millions of euro in extra funding will be needed to pay the rising cost of unemployment benefit, Minister for Social and Family Affairs Mary Hanafin has revealed.

The Government had forecast that average unemployment figures would be in the region of 290,000 when it drew up the budget for 2009 last October.

But Ms Hanafin says official figures to be released in the next fortnight will show the number of unemployed has already topped 300,000.

The most recent published figures give a figure of 290,000 on the live register, an unemployment rate of 8.3 per cent. Government officials estimate that if the economy continues to deteriorate, the number of unemployed could reach as high as 400,000 by the end of the year.

Ms Hanafin told The Irish Times she anticipated that at least €400 million extra would be needed to meet the rising cost of unemployment benefit. This would bring total spending on social welfare to more than €20 billion.

The latest job cut announcement came yesterday at Superquinn, the Irish-owned grocery chain, which said it was planning to axe 400 jobs and close its store in Dundalk as part of a range of cost-cutting measures.

The move, intended to cut €23 million from Superquinn’s cost base, is a response to declining sales, with cost-conscious consumers increasingly switching to German discounters Lidl and Aldi or shopping in Northern Ireland.

Superquinn staff were informed of the job cuts yesterday, with chief executive Simon Burke breaking the news to its 67 workers in Dundalk.

The store will close by the end of February. “We’ve been left with no alternative, sales have declined steadily there for the past 2½ years,” Mr Burke said in relation to Dundalk.

He said sales had declined by up to 25 per cent at the Dundalk shop in recent weeks as the euro strengthened against sterling. “We would be very clear that business was going across the Border.”

Superquinn and its trade unions will engage in a 30-day consultation process on how the restructuring will impact on the 3,300-strong workforce.

“Our bottom line will be to retain as many jobs as possible,” said Mandate assistant general secretary Gerry Light.

Speaking about the rising social welfare spend this year, Ms Hanafin said: “We have an allocation of €19.6 billion, so we know we’ll be back in seeking a supplementary estimate before the end of this year.”

“It will definitely be over €20 billion and possibly more. It’s important in the meantime that we continue to monitor fraud and save as much money as possible . . .”

As well as sharp increases in the numbers on unemployment benefit, the proportion of people in receipt of rental or mortgage assistance welfare payments is also set to rise sharply.

Last year the Department of Social Welfare received a supplementary estimate of €380 million.

Source : IrishTimes
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