The Taoiseach has said next Tuesday's jobs initiative will not solve the country's problems overnight but will introduce an element of economic confidence and stimulate growth.

Enda Kenny was responding to Opposition scepticism about the forthcoming jobs stimulus measures.

Fianna Fáil leader Micheál Martin said the Government had overhyped the initiative and claimed that it would include measures that had been announced before and were simply being re-packaged.

Sinn Féin's Mary Lou McDonald asked the Taoiseach what cutbacks and taxation measures would be introduced to invest in a serious strategy to create jobs.

She said it was ironic that the Government was following such a strategy when it had already been proven that the cutbacks culture had failed to stimulate economic activity.

Responding to the comments, the Taoiseach conceded that the initiative was not going to sort out Ireland's unemployment problem overnight, but it would provide a stimulus.

Mr Kenny said he would 'love' to be in a position to read out a list of initiatives to be funded by the €3bn that was being put into Anglo and other banks every year for the next ten years.

The Taoiseach has said that the situation was challenging, but it was not hopeless.

Earlier, Minister for Finance Michael Noonan told Fianna Fáil's Michael McGrath that the initiative would be ‘fiscally neutral’ by 2014, as had been agreed with the EU/IMF Troika.

But he said it was not going to be ‘a huge Keynesian initiative’ as the resources were not there.

He said that the jobs initiative will be morale-boosting and confidence-building as opposed to a 'huge spend'.

Mr McGrath had asked if the initiative would be met by spending cuts, tax increased or a combination of both.

IBEC calls for radical steps to tackle unemployment

Meanwhile, employers' body IBEC said radical and decisive steps are needed to tackle unemployment.

The group has made a submission to the Government ahead of the publication of the jobs initiative.

IBEC called for reform of State services, changes to wage rules and a loan scheme for small business.

The group said the Government should set up a national graduate internship programme and a work placement programme for the unemployed.

It also called for new third-level courses to help move those with construction-related skills into other areas of employment.

IBEC said a substantial loan guarantee scheme for small and medium enterprises should be introduced and it called for a big overhaul of the wage rules that set minimum terms and conditions in many sectors.

It said that there should be no further reduction of the public capital investment programme and a renewed focus on public private partnerships.

IBEC Director General Danny McCoy said Ireland had been in crisis management mode for too long and positive steps were needed to get the economy back on track.

He said business would provide job opportunities if the Government ensured the conditions were right.

The director of policy at IBEC said there was a disconnect between the State employment services and the social welfare payment system.

Brendan Butler said work had to be worthwhile but employers were in competition with the State benefits system for people who are long-term unemployed in receipt of full benefits.

Mr Butler said Ireland was unique in Europe in that those on long-term benefits receive the same amount of money as those who have just lost their jobs.