Dáil Éireann debate -
Tuesday, 17 Nov 1998

Vol. 496 No. 6

Written Answers - Black Economy Monitoring Group.

Eamon Gilmore

Question:

45 Mr. Gilmore asked the Minister for Finance the progress made to date by the black economy monitoring group, particularly in relation to subcontracting in the construction industry and the operation of the C45 system; and if he will make a statement on the matter. [23673/98]

Minister for Finance (Mr. McCreevy)

The Black Economy Monitoring Group was set up initially under the Programme for National Recovery. It has been continued in subsequent national agreements, including Partnership 2000. Paragraph 3.22 of Partnership 2000 defines the role of the group as follows:

The Government are aware of, and will take further measures as appropriate to counter tax and social welfare fraud. The Black Economy Monitoring Group, which is drawn from the Revenue Commissioners, the Department of Social Welfare, the CIF, IBEC and the ICTU, will continue its work of monitoring developments and reviewing the effectiveness of measures taken to combat tax and social welfare fraud.

I am informed by the Revenue Commissioners that the group continues to meet regularly, approximately every two months, to monitor developments and to review the effectiveness of measures taken to combat tax and social welfare fraud. The membership of the group has been extended to include the Small Firms Association, so that particular concerns of the small business sector can be included in the group's deliberations.

The Revenue Commissioners and the Department of Social, Community and Family Affairs respond to the concerns raised in the group by carrying out investigations of the matters raised and, where there is evidence of black economy activity, taking appropriate action. Where necessary, the question of amending the tax or social welfare codes would also be considered. Also, the Revenue Commissioners and the Department of Social Community and Family Affairs keep members of the group informed of new initiatives to tackle the black economy.

The group has proved to be a useful forum for exchange of information on black economy activity. Tangible results have been achieved in relation to the construction industry where the group made recommendations, since implemented, on the tightening up of the sub-contractor system. The group continues to focus on concerns raised by IBEC and the SFA about social welfare fraud and the difficulties being experienced by employers in attracting persons in receipt of social welfare benefits to take up employment. In this regard, the group was briefed, at its last meeting, by a representative of FÁS, regarding the work of that organisation. Areas covered included the Employment Action Plan recently launced by the Tánaiste, linkages between FÁS and the Department of Social, Community and Family Affairs and the experience of FÁS in liaising with employers.

I am informed that the group has been instrumental in the formation of a working group comprising FÁS, the Department of Social, Community and Family Affairs and the CIF which is considering ways of dealing with the skills shortage in the construction industry. In the light of concerns expressed by the group, the Department of Social, Community and Family Affairs is taking ongoing action to ensure that only genuinely unemployed construction workers remain on the live register.

The group was briefed on the special project undertaken by Revenue to ensure that the correct system of tax deduction is operated in respect of workers in the construction industry. I am informed by the Revenue Commissioners that the group will be provided with a report of the outcome of the special project, at its next meeting. However, the point has been made in the group that the disputes in the industry concerning employment practices are primarily an industrial relations rather than a black economy issue. I am informed that the Revenue Commissioners regard the issue as a black economy issue only in so far as employers incorrectly categorise workers as self-employed but that the Revenue cannot dictate the terms under which workers are engaged.

The Black Economy Monitoring Group has a construction industry sub-group, which includes representatives of employers and unions in the industry as well as representatives of Revenue and the Department of Social, Community and Family Affairs. This sub-group was set up specifically to deal with black economy issues relating to the construction industry. Any member of the sub-group who feels that there are black economy issues relating to the industry which need to be brought to the attention of Revenue and the Department of Social, Community and Family Affairs is free to call for a meeting of this sub-group.