Written Answers. - Employers' PRSI.
Seán Barrett
Question:
18
Mr. Barrett
asked the
Minister for Social Welfare
if his attention has been drawn to a report (details supplied) which showed that, when offered a range of measures which should allow them to increase staff, firms put a reduction in employers' PRSI at the top of the list; and if he will take this into account in framing policy for the 1994 budget.
Dinny McGinley
Question:
19
Mr. McGinley
asked the
Minister for Social Welfare
if his attention has been drawn to a report (details supplied) which showed that, when offered a range of measures which should allow them to increase staff, firms put a reduction in employers' PRSI at the top of the list; and if he will take this into account in framing policy for the 1994 budget.
John Bruton
Question:
31
Mr. J. Bruton
asked the
Minister for Social Welfare
if his attention has been drawn to a report (details supplied) which showed that, when offered a range of measures which should allow them to increase staff, firms put a reduction in employers' PRSI at the top of the list; and if he will take this into account in framing policy for the 1994 budget.
Paul McGrath
Question:
36
Mr. McGrath
asked the
Minister for Social Welfare
if his attention has been drawn to a report (details supplied) which showed that, when offered a range of measures which should allow them to increase staff, firms put a reduction in employers' PRSI at the top of the list; and if he will take this into account in framing policy for the 1994 budget.
Liam Burke
Question:
50
Mr. L. Burke
asked the
Minister for Social Welfare
if his attention has been drawn to a report (details supplied) which showed that, when offered a range of measures which should allow them to increase staff, firms put a reduction in employers' PRSI at the top of the list; and if he will take this into account in framing policy for the 1994 budget.
Frank Crowley
Question:
53
Mr. Crowley
asked the
Minister for Social Welfare
if his attention has been drawn to a report (details supplied) which showed that, when offered a range of measures which should allow them to increase staff, firms put a reduction in employers' PRSI at the top of the list; and if he will take this into account in framing policy for the 1994 budget.
I propose to take Questions Nos. 18, 19, 31, 36, 50 and 53 together which are all identical.
I have seen the report in question, and I was particularly pleased to note its finding that two-thirds of respondent firms expect to either maintain current employment levels or take on additional staff in 1993. Given that the survey was undertaken in January 1993, a particularly turbulent time for business, this is a very positive response on the issue of employment.
The replies in relation to PRSI need to be seen in context. Firms were asked to rank in order of preference which, if any, of a number of measures would allow them to recruit additional staff. The options included reduced PAYE and PRSI, and employment subsidies. Many firms left this question unanswered or commented that these changes would be of little relevance, given the weakness of domestic and international markets and the volatility of interest rates. Since the time of the survey, there have been distinct signs of improvement in the economy and, in particular, a fall in interest rates. This will be of considerable help to firms' job creation efforts.
In relation to employers' PRSI, I must point out that any reduction would be very expensive. Each percentage point reduction would cost £85 million annually. Any such reduction would, therefore, need to be carefully considered. It is by no means certain that such a reduction would lead to a net increase in employment. While the firms who got the benefit of the reduction might increase their employment, the funds needed to pay social welfare payments would then have to be found elsewhere in the economy, and that could have the effect of reducing employment elsewhere.
Furthermore, a PRSI reduction would not necessarily be well targeted on those firms experiencing difficulties in retaining or creating jobs; some of the expenditure could go on increased profits, rather than increased employment.
I will continue to keep the situation under review. Any reduction in PRSI could only be examined in a budgetary context. Furthermore, given the financial implications of such a move, a change could only be considered if it were clear that, overall, there would be a tangible and beneficial effect on employment.
