Vol. 424 No. 8
89 Mr. Allen asked the Minister for Finance if, in view of the ongoing situation regarding the strength of the punt against the pound sterling, he will now ease the PRSI system to help firms going through difficulties, especially companies which have a large export business.
The Government does not favour using the PRSI system to direct assistance to firms or sectors going through difficulties at present. The PRSI system is a good one; it is clearly understood and easy to administer and fulfils the very important objective of making funds available — £1.5 billion this year — for a range of Social Insurance benefits.
Our PRSI rates are highly competitive vis-à-vis other EC countries, and there are no viable alternatives to raise the necessary resources otherwise than through the tax system. In this regard it is well to remember that an across the board 1 per cent reduction in employers' PRSI would cost £85 million.
Our system is not suited to differentiation by reference to either individual firms or sectors. Firm by firm differentiation would require the use of information and criteria which are entirely outside the scope of Social Welfare legislation and administration. A sectoral differentiation, besides being inequitable and inefficient as a means of targeting relief, would be extremely difficult to administer on any kind of stable basis.
Finally, any differentiation would lead to demands for its extension to other sectors or to meet other circumstances. This could severely jeopardise the funding of the Social Insurance Fund which has outgoings of £1.7 billion in 1992.
In short, the Government does not regard differentiation of PRSI treatment by firm or sector as an appropriate instrument of industrial policy intervention. The system is there to obtain the resources needed to finance a wide range of benefits for insured contributors; it is simple, easy to administer and our PRSI rates are among the lowest in Europe.
