Vol. 432 No. 4
8 Mr. Currie asked the Minister for Social Welfare the nature of the urgent review he is carrying out on the impact on low paid manufacturing firms of the operation of employers' PRSI; and when he expects this review to be complete.
13 Mr. Connaughton asked the Minister for Social Welfare the nature of the urgent review he is carrying out on the impact on low paid manufacturing firms of the operation of employers' PRSI; and when he expects this review to be complete.
17 Mr. Harte asked the Minister for Social Welfare the nature of the urgent review he is carrying out on the impact on low paid manufacturing firms of the operation of employers' PRSI; and when he expects this review to be complete.
23 Mr. Crawford asked the Minister for Social Welfare the nature of the urgent review he is carrying out on the impact on low paid manufacturing firms of the operation of employers' PRSI; and when he expects this review to be complete.
31 Mr. Nealon asked the Minister for Social Welfare the nature of the urgent review he is carrying out on the impact on low paid manufacturing firms of the operation of employers' PRSI; and when he expects this review to be complete.
34 Mr. Carey asked the Minister for Social Welfare the nature of the urgent review he is carrying out on the impact on low paid manufacturing firms of the operation of employers' PRSI; and when he expects this review to be complete.
35 Mr. Finucane asked the Minister for Social Welfare the nature of the urgent review he is carrying out on the impact on low paid manufacturing firms of the operation of employers' PRSI; and when he expects this review to be complete.
47 Mr. J. Bruton asked the Minister for Social Welfare the nature of the urgent review he is carrying out on the impact on low paid manufacturing firms of the operation of employers' PRSI; and when he expects this review to be complete.
I propose to take Questions Nos. 8, 13, 17, 23, 31, 34, 35 and 47 together.
The review in question is being carried out by officials of my Department, the Department of Finance and the Revenue Commissioners. The review will involve an assessment of the extent to which existing PRSI arrangements may have an adverse effect on industry, either generally or in specific sectors. In the light of this review the Government will consider whether specific action needs to be taken in this area. Any such action would have to be taken within the framework of the Government's commitment to the social insurance system and bearing in mind that other sources for financing social insurance are not readily available. The review will examine the scope for alternative methods of financing this, and their likely effects on industry and employment.
I expect the review to be completed before the end of this year, in time for its recommendations to be considered in the context of the 1994 budget.
Can the Minister indicate to the House the time limit within which this review is to be concluded? Is he aware that as a result of the recent VAT increase on the clothing and footwear industry some companies have already closed? Furthermore, is he aware that the Minister for Finance at budget time indicated that he would look sympathetically at the clothing and footwear industry in regard to the PRSI concession to be given to employers? Would he comment on that?
Yes, the Minister for Finance has had a number of meetings with representative groups in the clothing and footwear sector in relation to the impact on firms in that sector of the application of the standard rate of VAT. This proposal was just one of the issues that arose from those discussions. Other issues are at present being examined in addition to other possible measures which might be taken. Generally it is one proposal on which we are not particularly keen because there was not much evidence of improvement in the uptake of jobs when we did so previously. For instance, there is a free PRSI scheme in operation for employers. When a similar scheme was operated previously it had little impact in terms of employment. However, it could have an impact on this industry. That question is being examined so that it can be taken into consideration in the medium-term. In the meantime, the Minister for Finance is considering a number of other measures which could have a more immediate impact.
As the Minister is aware, those involved in the clothing and footwear industries were bitterly disappointed when changes were made in the rates of VAT. In discussions which the Minister for Finance later had with IBEC he stated that he would consider granting a concession to this industry. I asked the Minister earlier to indicate when the review is likely to be completed.
As I said in my initial reply, I expect the review to be completed before the end of the year in time for the recommendations to be considered in the context of the 1994 budget. The matter can be approached in different ways. Hence there is a need for a comprehensive review. The Minister for Finance is considering other measures which may have a more immediate impact in this area.
Does the Minister agree that it would be much better to introduce a minimum wage in low pay industries rather than exempt employers from their obligations under the PRSI system? Will he indicate whether the student workfare scheme, whereby students will not be covered by the Department of Social Welfare and will be obliged to sign a form which makes it clear that they recognise that they will not have any protection when they take up these so-called jobs that the Minister is providing, will be considered as part of the review?
The question of a minimum wage is one for another Minister.
Of course.
From the point of view of the Department of Social Welfare, it is important that reasonable wages are paid. Otherwise there would be a conflict in terms of the payments we make and low wages. This is one of the reasons the family income supplement was introduced. As I said, it is a matter for another Minister.
Deputy De Rossa rose.
I call Deputy O'Donnell.
Will the Minister respond to the second part of my question which relates to the fact that students will not be covered when they take up the so-called jobs that the Minister is providing for the summer? They will have to sign a form.
We are covering them——
They will have to sign a form which makes it clear that the Department will not be responsible.
——for occupational injuries and a J1 stamp.
They will have to sign the declaration.
That is normal.
Deputy De Rossa, Deputy O'Donnell had been called.
Will the Minister answer the question? Why will students be asked to sign a declaration that they will not hold the Department responsible?
I am glad to hear that a review is under way but for many small businesses which find themselves in difficulty to wait until the end of the year is a long time. Can the Minister say if, as part of the review, the procedural difficulties which small firms face in employment creation will be considered? I understand that many small firms feel they are hounded rather than helped by the State when they try to create jobs. It is in everybody's interest that jobs are created. However, many small firms encounter administrative difficulties in regard to the PRSI system in job creation.
The impact of the employers' PRSI system on low paid manufacturing firms is being considered in the review. As I said, there are other ways of tackling those problems which will also be considered but not as part of that review.
I put it to the Minister that students will be asked to sign a form to the effect that the Department of Social Welfare will not be responsible for them when they take up the so-called jobs that the Minister claims he is providing for them during the summer. The Minister has now claimed that they will be covered for occupational injuries. Will he explain what precisely they will be excluding themselves from when they sign this form?
We have had that before.
That brings us back to a previous question when I made two points. It got a bit noisy subsequently——
That was the Minister's fault.
It was not.
I say it was.
I did not accuse the Chair of anything. To respond to Deputy De Rossa, they will be covered for J1 stamp and for general insurance which is a matter for the sponsoring organisations. As a matter of interest, we have provided some advice on that matter because organisations can avail of some keen prices.
