Vol. 682 No. 5
55 Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on the impact of the Obama Administration’s recently announced tax reform on foreign direct investment here; and if she will make a statement on the matter. [20226/09]
As the proposed tax changes outlined by the US Administration on 4 May were proposals rather than detailed draft legislation, it is not possible to definitively state what the effect will be for US foreign direct investment in Ireland. However, the stated intention of the Obama Administration is primarily to target US companies which invest in countries widely considered to be tax havens. Ireland, of course, is not a tax haven nor is it considered as such by the US Government.
The Minister for Finance and I have already briefed our Cabinet colleagues on the proposed changes. Given that more than 450 American companies have already invested more than $55 billion in Ireland, we are acutely aware of the importance of potential changes to the US tax code on American investment abroad. I recently met the US Secretary of the Treasury, Mr. Timothy Geithner, and several members of the US Administration. The Government is committed to maintaining contact with the US Administration in the time ahead.
The Government has maintained a monitoring system for developments in the US international tax code for a number of years. In addition, a contact group comprising senior officials from my Department, the Departments of Finance and Foreign Affairs, the IDA and the Revenue Commissioners has been meeting to monitor ongoing developments. We will continue to engage with the US Administration and Congress as this issue develops and the initial proposal evolves into legislation. To this end, the IDA has deployed a senior executive to the Irish embassy in Washington as a point person to monitor and engage with this issue.
I note that the Tánaiste is alone today. I am aware that her junior ministerial ranks have been somewhat depleted by the recent decision to reduce the number——
One of my Ministers of State is in Russia and another is in Bahrain. I sincerely hope another man is crossing the road.
I hope they are not doing a Deputy McGuinness and leaving her on her own.
They are doing work on my behalf and on behalf of the State.
I am delighted to hear that.
As the Tánaiste noted, multinational investments, particularly by US-owned corporations, are extremely important to Ireland. These corporations employ approximately 100,000 people. A number of large investments have been made in my constituency of Dublin West by firms such as IBM and eBay. I agree with the Minister that Ireland is not a tax haven but I am concerned that only four countries or territories were named in the document released by the White House — Ireland, the Netherlands, the Cayman Islands and Bermuda. Ireland is called a low tax jurisdiction, not a tax haven, in the document. In her discussions with Mr. Geithner, Secretary of the Treasury, did she express her concern that Ireland was put in the same group as the Cayman Islands and Bermuda?
I hope the Minister will not drop the ball on this potentially important matter. She intervened much too late in the process at Dell and SR Technics to have an effect. If she and the Government are to have influence, it is important they become involved with the US Congress and Administration to lobby them regarding these tax proposals. Will the job that is to be done through the embassy also be done through the IDA? Will there be a focus on lobbying the Irish-American caucus in Congress, which, while not as strong as it was in the past, should still be briefed about our interests and asked to support them?
I am glad the Deputy appreciates there is FDI investment in his constituency. He will, therefore, be acutely aware of the implications this decision has for his constituency, not to mention Ireland. On the occasion of the Taoiseach's visit to the US, he mentioned this issue to President Obama. I met Secretary of the Treasury, Mr. Geithner and we had a 35-minute discussion on a number of issues but this was the primary reason I met him. I also met my opposite number in the Department of Labor and Ron Kirk to discuss these issues. I then took the opportunity over a day to meet a number of the key leaders in the US Senate and Congress and members of the ways and means committee, which will make the final determination on Capitol Hill.
I, along with all my ministerial colleagues who travel to the US, will continue to raise this issue. I also met representatives of a number of corporations on my two visits to the US and we are working with them in the US and in Ireland. We have always had the number one tax experts in the US. They have worked with the IDA and will continue to do so and we have redeployed a senior executive from the IDA to work exclusively on this.
This is a hugely important issue and we will continue to use every avenue available through corporate America, through our corporate presence here and the platform we have here and at political level. A congressional delegation will travel to Ireland in the summer and it was my clear intention in speaking with Congressman Neal that we would have a further opportunity to develop the issue and I am sure Members will do likewise.
I appreciate the Minister's response but I would like specific answers to my questions. Did she raise with Timothy Geithner the fact that Ireland was one of only four territories named in the report? One of the specific examples given related to the US wanting to end the system whereby companies investing in an unnamed country with a 12.5% tax rate are able to offset the cost of building facilities against their tax liability in the US. Did the Minister mention to Mr. Geithner that she was unimpressed Ireland was named among the four territories?
I am glad Ministers and officials will raise this issue with members of Congress at every opportunity but that is not good enough. A concerted lobbying campaign of Congress members is needed. Is a strategy in place to do so or will an ad hoc arrangement be adopted every time there is a visit back and forth?
I discussed the tax haven issue with Secretary of the Treasury, Mr. Geithner. Two taxation Bills have been introduced in the US Senate — one contains a list of 34 countries in which Ireland is not included and the other is based on a report prepared for the US Congress and released in December by the US Government Accountability Office, GAO. The GAO's determination is based on figures from the 1980s. The Irish ambassador to the US has written to the Department of the Treasury on our behalf expressing concerns about the matter of our inclusion in the report. We feel the inclusion is unjustified and we have set down the reasons for that. However, I took the opportunity to express the Government's view to the secretary on it.
This is not an ad hoc matter and a group in my Department is working on it. The ambassador, as our representative in the US, along with senior executives in the IDA will work ad infinitum to deal with this issue. The IDA’s role is to work with companies who are also lobbying in the context of this legislation.
56 Deputy Willie Penrose asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has conducted an economic analysis of the impact on the Irish food industry of moves by a retailer (details supplied) to source branded goods from the United Kingdom and the introduction of UK plannograms which would appear to indicate a reduction in the amount of space available for Irish brands by between 40% and 60%; and if she will make a statement on the matter. [19850/09]
The relationships between suppliers and retailers and the contractual agreements entered into by them, as with any other parties entering contracts, is essentially a matter for the contracting parties themselves. Retailers, including the retailer referred to in the Deputy's question, have for some time maintained that the costs of sourcing goods in Ireland is significantly greater than the costs of sourcing such goods in Northern Ireland and the UK and that the current structure of the wholesale and distribution cost base in Ireland is preventing the benefits of the euro's appreciation in value over sterling from being passed on to consumers.
The retailer concerned has publicly stated that it changed the manner in which it sources certain internationally branded products as international suppliers were treating its operations in this country significantly differently from how they treated its operations in other jurisdictions such as the UK and that the direct consequence of these changes has been a significant reduction in its prices to consumers. The retailer has advised that notwithstanding the introduction of new internationally sourced products, it has retained its comprehensive range of familiar Irish products and brands.
The Deputy will be aware that I requested the Competition Authority to carry out a study of the retail import-distribution sector as to how competition is working in the sector and whether any practices or methods of competition are affecting the supply of goods and services in that sector. I received the authority's report on 30 April and I am examining its findings. I will publish the report shortly.
I thank the Minister but that was a bureaucratic reply written by bureaucrats. On 5 May Tesco reopened 11 stores in the north east using international brands sourced from UK rather than Irish suppliers and UK plannograms were put in place. Tesco claimed 12,500 prices would be reduced across the 11 stores by an average of 22% but a document, which The Irish Times acquired through good investigative journalism and which was quoted by Philip Boucher-Hayes on RTE Radio 1 last Thursday evening as I drove home from the House, indicates the reduction in a basket of frequently purchased goods is much closer to 8% than 22%.
Is the Minister aware the same documentation indicated that Tesco made a profit of 9.3% in Ireland in 2008, which is projected to increase to 9.5% this year, as opposed to a profit of more than 6% in the UK and 6.5% for its parent company? Its profits are 50% higher here than elsewhere. The Minister stated in the House previously that she was monitoring Tesco's decision to source international brands from the UK and to implement a new formula at the 11 stores I mentioned, thus reducing the space available for Irish brands. Is she aware that Tesco is making such profits, which have long been a closely guarded secret, in Ireland and that, despite these super profits, the company is looking for Irish suppliers to take a cut of least 20%? Is that not a cause for concern?
Job losses were announced last week. According to a number of unions, two Irish suppliers are experiencing difficulties, while according to Philip Boucher-Hayes on whom I rely and to whom I listen carefully, a number of Irish suppliers were told unilaterally without so much as a letter or a telephone call that their shelf space would be reduced overnight without negotiation or explanation. I am concerned about this. Is that good enough in the current climate for our 230,000 food producers? Many of them may lose their place.
We have had a great deal of discussion in the House over the past year on the prices consumers have to pay. We continued through the National Consumer Agency, NCA, to conduct comparative analysis, North and South. My view and that of many other Deputies, including Deputy Penrose, was that hedging could not be accepted as a method by which people had shown prices, and that we needed good value for our consumers. Given that the buying and spending power of consumers has been reduced, people naturally expect better value for money. As a former Minister for Agriculture, Fisheries and Food, I am aware that must be balanced with a sustainable Irish food sector.
It has been brought to my attention anecdotally that there are concerns about access to supermarket shelves. I met with Tesco representatives prior to the announcement of a reduction in prices in Border areas. They reassured me that they would continue to have Irish products available. Meanwhile, suppliers have indicated that they are finding it more difficult to sustain their activities. Moreover, it is important to say that any retail sector company, if it is making a profit and can sustain its business, should grant price reductions to consumers as well as giving a fair return to suppliers.
Forfás has evaluated the cost of doing business and I have given my views on that. The Competition Authority has undertaken work on my behalf on the costs from suppliers to the supermarket shelf. We must have a balance — I appreciate the Deputy is trying to do so — between the need for a vibrant food industry and providing value for money to consumers.
Shelf space means availability for people's products. If that is reduced or they are pushed into the background, it means some people will go out of business. Does the Tánaiste agree with that? Strong companies will wipe out many of the weak ones. Is the Tánaiste aware that some major Irish products are no longer finding shelf space? Is she also aware that there is a strike ballot at Tesco and that the company is reducing people's working week by nine or ten hours? They are also talking about cutting out the Christmas bonus for those workers. How much more profit does Tesco want to make from ordinary workers, some of whom will find it very hard to pay their mortgages or car loans? I have met those workers who are not even allowed to speak to the media.
The issue of shelf space is one for individual companies but I appreciate the Deputy's concern. His committee could have a role in the context of both reports that will now be made available — the first on the cost of doing business and the second by the Competition Authority. I would welcome further investigative work by the Committee on Enterprise, Trade and Employment, which would be complementary to the work I am carrying out. I am sure the Chairman, Deputy Penrose, might facilitate, that.
I will do so.
57 Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on a code of conduct for suppliers and retailers to ensure that consumers are protected and retailers cannot abuse a dominant market position; and if she will make a statement on the matter. [20227/09]
The relationships between businesses and the contracts entered into by them are essentially matters for agreement between the parties themselves and I have no direct function in the negotiation of such contracts. It is the case, however, that there are specific provisions in competition law which extend to business relationships, including relationships between suppliers and retailers. These provisions essentially prohibit undertakings from engaging in certain anti-competitive practices including price-fixing; applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; making the conclusion of contracts subject to acceptance by the other party of supplementary obligations which, by their nature or according to commercial usage, have no connections with the subject of such contracts; abusing a dominant position; requesting "Hello money"; and imposing resale price maintenance.
As I have said on previous occasions, I would urge anyone who considers that he or she is being treated in an anti-competitive manner to bring his or her complaint to the attention of the Competition Authority, which is the independent statutory agency responsible for the enforcement of competition law in the State. Alternatively, a supplier can bring a private action to the courts either for breach of the Competition Acts or for breach of contract.
In so far as the issue of a code of practice is concerned, I am aware of suggestions that have been made by a number of commentators that consideration should be given to introducing a code of practice to regulate the relationship between suppliers and retailers, and this is being examined by me at present.
The Deputy will be aware that my Department carried out a review of the existing competition law framework in the course of 2008. Legislation is currently being prepared to give effect to a number of changes to competition law arising from that review. While I would have no objection in principle to considering any concrete proposals on the way competition law impacts on the relationships between businesses, any such proposals would need to address how any new regulations would be enforced in practice.
In many ways, this question is connected to Deputy Penrose's previous question.
Yes.
I wish to echo some of his comments about the position of employees in Tesco. That company is making substantial profits in this country, probably in the region of €200 million per annum, although we do not know for certain. There is a strong case for the company to introduce a profit-sharing mechanism as an alternative to the traditional system of national wage agreements, which has now largely fallen apart.
We all understand the background to this question, in that huge numbers of people are travelling to the North to buy cheaper consumer goods there. Anything we do must recognise that. I welcome the fact that consumer prices are now starting to fall in shops across Ireland, but there must also be a degree of fair trade as well. In a free market there must be access for everyone. We cannot have a situation whereby suppliers are denied fair access to that free market. Suppliers and distributors will have to reduce their costs but most of the costs that disadvantage them are imposed by Government policies on rates and energy charges. Most of those high costs are created by Government policy. Aside from Government action to cut costs, due consideration must be given to introducing a code of conduct similar to what exists in the United Kingdom. That could ensure that, at the very least, Irish suppliers would get fair access to the market. In the meantime, we need to bring down those costs. That is the real issue.
The reduction of costs, including the cost of doing business, is paramount. Competitiveness continues to be the mantra within my Department.
When will the Tánaiste make it happen?
Work is ongoing on reducing energy and labour costs, as well as reducing the administrative burdens in doing business. We have seen some reductions but we will continue to strive for further reductions in the cost of doing business. I listened to the quip and I cannot resist the temptation to remind Deputy Varadkar that all but five local authorities have Fine Gael-Labour majorities, so it is in the hands of those elected representatives to deal with rates. The Deputy should consider that. When it comes to the local elections, if people want change perhaps they should be voting for Fianna Fáil, which is acutely aware of the needs of small businesses.
Having said that, a balance must be struck between the sustainability of the food sector and value for money for consumers. We should not have massive variations in retail sector profit margins, which are not in the best interests either of retailers, suppliers or consumers. If we want to continue to have a vibrant retail sector, such balance will be required. Other retailers are doing their utmost to ensure we have Irish products available. My personal view is that Irish products comprise one of the attractions and while we must take the necessary decisions, that cannot be done in a vacuum. Striking a balance in all those issues will sustain a valuable retail food sector, as well as ensuring that we still have value for money.
I appreciate that some work is being done by the Competition Authority in this regard but the end point will have to involve some code of conduct to which both retailers and suppliers can refer. Can the Tánaiste not begin the process now of bringing suppliers and retailers together with a view to drawing up such a code of conduct so that there can be fair access to the marketplace?
I wish to advise the Deputy that the preliminary work has been done and I will continue to bring that matter to a finality. However, I believe in the role of the Oireachtas and, as I have indicated, I take the view that the Committee on Enterprise, Trade and Employment has a valuable role in pursuing these issues further. The outcomes of those deliberations will enhance the discussions that are taking place publically.
58 Deputy Deirdre Clune asked the Tánaiste and Minister for Enterprise, Trade and Employment the action she is taking to protect and support small business; her views on the continued lack of credit available to viable businesses; the effect she estimates the credit shortage will have on small business; the further action she will take to deal with the problem of credit flows and small business; and if she will make a statement on the matter. [20228/09]
A properly functioning banking sector is an essential element for the maintenance and development of enterprises, especially SMEs. Government focus has been on creating a fit for purpose banking system as is evidenced by the bank guarantee scheme, the recapitalisation scheme, the nationalisation of Anglo Irish and the establishment of the National Asset Management Agency. Substantial guarantees and funding have been committed to the banking sector in order to keep the banks functioning to support the broader economy.
A key principle of all these actions is the recognition of the importance of business lending particularly to SMEs. Small and medium-sized enterprises are central to our economy and the provision of bank credit to the sector is a primary target of all these initiatives. The banks' recapitalisation package contains a range of initiatives to assist directly our enterprise sector, including that the recapitalised banks have committed to increasing their lending capacity to SMEs by 10% over 2008, which should ensure that sound businesses will receive support from their banks; and a €100 million environmental and clean energy innovation fund is also being established by each bank, as well as a further €15 million each to new or existing seed capital funds. Much of this funding will flow to small and medium-sized enterprises.
SMEs are also covered by the code of conduct on business lending to SMEs. This code, which was published by the Financial Regulator, came into effect on 13 March 2009. The application of the code will promote fairness and transparency in the treatment of SMEs by the banks and should facilitate access to credit.
The recapitalised banks have also agreed to pay for and co-operate with the carrying out of an independent review of bank lending to SMEs. Additional banks have now agreed to participate in this review.
Allied Irish Banks, Bank of Ireland and Ulster Bank will also provide funding for SMEs on foot of a €300 million facility provided by the European Investment Bank to assist developing SMEs.
The banks have undertaken public campaigns to actively promote their lending to SMEs. Recently, they have used recent press and television advertisements and announcements, together with information sessions with businesses, to demonstrate this commitment.
Additional information not given on the floor of the House.
I fully accept that the banks have a responsibility to provide credit facilities to support sound and viable enterprises and I would be concerned if they were not meeting their commitments under the recapitalisation package. Banks do, however, need to be prudent about the projects they support and their assessment of viability.
My colleague, the Minister for Finance, has responsibility for the banking system and I am in regular contact with him on the matter, as are officials of both Departments. In addition, I have met with the business representative bodies, the banks and the enterprise support agencies to ensure that all sides have a common understanding of the issues and a common commitment to support viable businesses. I will continue with these contacts.
The recapitalisation package makes reference to a clearing group made up of representatives of government, banks, business interests and State agencies to identify patterns of events where the flow of credit to viable projects appears to be blocked and to seek to identify credit supply solutions. This group is being chaired by my Department and will work to provide a clear picture of any emerging lending patterns while facilitating direct discussion by all the relevant interests in addressing problems.
Separate to the banking issues, my Department's continuous support for enterprises arises through maintaining a positive business environment and through particular interventions from the State development agencies such as Enterprise Ireland, FÁS and the county and city enterprise boards. The significant allocations in my Department's Estimates for 2009 for the development agencies ensures that we can continue to build on this strategy for the future.
How does the Tánaiste's answer square with last week's ISME survey, which found that 58% of companies have been refused credit by banks, an increase from what was found in a previous survey? The survey also found that 83% of SMEs feel the banks are making it difficult for them to access credit and that European Investment Bank loans have not been marketed to SMEs. Following the banks' recapitalisation and last September's guarantee scheme, funding is still not flowing to small and medium-sized enterprises and many of them are finding it extremely difficult to operate in the current financial circumstances. These are not fledgling businesses; they have been established for ten years or more and have a sound profitable base. Many of them have to let staff go and others fear for their future.
Will the Tánaiste outline how European Investment Bank loans will be channelled to small businesses? Many candidates in the European elections, particularly those in the Tánaiste's party, have commented on how valuable these will be for small and medium-sized enterprises, yet surveys and feedback to Members of this House tell us that this is not happening. It is a constant source of concern.
I am aware that there are concerns and that is why a considerable period of time ago we set up a round table forum. Today, I will announce the establishment of a clearing group that will include the Minister for Finance and I. It will be chaired by my Department and the Department of Finance and will include the Irish Banking Federation, AIB, Bank of Ireland, Ulster Bank, National Irish Bank, Bank of Scotland Ireland, Anglo Irish Bank, representatives of ISME, the Small Firms Association, SFA, Chambers Ireland, the IFA, Forfás, Enterprise Ireland, the IDA and Fáilte Ireland. This is the framework in which we will assess and analyse lending capacity and what is happening.
I agree that there are significant issues for small and medium-sized enterprises. I want to be able to ascertain in a serious way the specific pattern of events that are happening and, most particularly, to identify some of the credit supply solutions that need to be provided to address the concerns that every Member of the House has raised.
We have seen that access to working capital is difficult. We have also seen difficulties with other capital mechanisms such as overdrafts and the methods by which stock is purchased. One must also appreciate that there will be clearer thinking on how people will lend and on the difficult issue of the availability of cash. We will use the clearing group as a method by which we can address many of the concerns raised.
Has the Tánaiste considered providing a State-backed Government-guaranteed loan scheme specifically for SMEs, similar to that which operates successfully in the UK? This would be of benefit. It has worked to facilitate loans directly to SMEs in the UK.
Under the temporary framework that was signed off by the European Union, all of those mechanisms are available to Irish industry. For example, loan guarantees are also available in this State——
Not a specific State-backed guarantee.
Yes, they are and they have worked, contrary to Deputy Clune's opinion. These mechanisms are available and part of the recapitalisation programme is to ensure that more capital is made available to these companies.
I also want to advise the House that the method by which grant aid is provided by Enterprise Ireland, the IDA, Údarás na Gaeltachta and Shannon Development is a tripartite approach between the agency, the bank and the client, which never happened before. This is to assure the client that, when grant aid is available and due diligence is done, it will stand up from a banking perspective. I am not saying it is easy to get access to finance; some of the rules have changed. However, the criteria for lending have also changed. That being said, it is my clear intention to use the round table forum and the clearing house to pursue this matter vigorously on behalf of the people that I must represent, namely, the business sectors.
59 Deputy Deirdre Clune asked the Tánaiste and Minister for Enterprise, Trade and Employment her plans to reduce Government controlled costs imposed on small businesses; and if she will make a statement on the matter. [20229/09]
The issue of competitiveness is key to my response to business needs, especially for the SME sector. Ireland has consistently been an economy in which it is easy to do business, and it has seen the growth of a large number of successful new enterprises, many of them SMEs.
Ireland is a leader in having the lowest cost for setting up a business and is lightly regulated, which in itself lowers costs for business. Ireland also has the third lowest rate in the EU of corporation tax, which lightens the tax burden on businesses and gives them an advantage over competitor countries.
Current trading conditions for companies are difficult and challenging because of various issues such as the devaluation of sterling, energy and wage costs, tough competition and the decline in exports. Some issues are outside the control of the Government as a whole, but where possible and appropriate, we can address some key areas, for example, energy and local charges. We are addressing our cost competitiveness as an essential element of our economic recovery. Nothing should come in the way of these firms to inhibit or stop them from growing their businesses.
I am conscious that energy costs for businesses in Ireland are a source of concern, particularly as businesses are attempting to cut costs to remain competitive in the current economic environment. However, in recent months, the trend of energy prices has been downward. In response to this trend, the Commission for Energy Regulation lowered electricity prices for residents and SMEs by 10% from 1 May. Gas prices were reduced by an average of 12%. According to the latest published Eurostat comparisons, smaller SMEs are paying 1% below the average EU 27 price. Approximately 60% of ESB's SME customers are in this category.
On 8 May, the Government launched the national energy efficiency plan. This reiterates that the best method for businesses to cut energy costs is through energy efficiency. The new plan includes advice and mentoring for SMEs on how best they can reduce these costs. In addition, we have provided incentives to business to purchase energy efficient equipment and we will continue to promote energy efficient best practice. Sustainable Energy Ireland also offers a broad range of assistance to enterprises in achieving significant cost savings.
The Minister for the Environment, Heritage and Local Government, Deputy John Gormley, and I have impressed on local authority managers the concerns of Government about costs for enterprise, including local authority charges, and asked them to consider measures to support new or existing enterprises in their area by, for example, reduced development contribution rates, or deferral of payments.
The Government has also implemented an 8% reduction in professional fees for public service bodies from 1 March of this year.
Additional information not given on the floor of the House.
Recently published indicators are in our favour with inflation, commodity and other prices falling. The consumer price index figures released last week are an indication of falling Irish prices in a number of areas, with Ireland showing the highest cut in prices. This brings Ireland closer in line with average EU prices, going some way towards restoring our overall cost competitiveness. Through our overall tax and regulatory structures, we are committed to continuing our efforts to sustain our existing pro-enterprise and pro-business economy.
The Minister referred to energy, wages and local authority charges, which are the bugbear of many small and medium enterprises. This country has extremely high energy costs; they are the second highest in Europe. These costs could be controlled through a different approach to our regulatory model. Labour costs are very high. Already this year the retail sector will be obliged to introduce a 2.5% increase in October, due to joint labour committees, JLCs. This is out of employers' control and they must implement it. The same thing happened in the hospitality sector. What plans does the Minister have to address wage costs? Does she believe the minimum wage should be reduced?
With regard to JLCs and employment regulation orders, EROs, I noted the discussion that took place in the House on the Employment Law Compliance Bill. There was a variety of views and perspectives and I look forward to bringing that legislation to a conclusion. How we will manage that I do not know, but with such a variety of views it will be difficult to anticipate how the final legislation will look.
There should be a free vote in the House. We will see how many Fianna Fáil Deputies vote for the Minister's Bill.
There is an issue with the JLCs in the catering, hotel and tourism sectors. When Deputy Billy Kelleher was in the Department he finalised the amalgamation of two of the JLCs and was dealing with the issue of Sunday working hours. The new Minister of State, Deputy Dara Calleary, is pursuing the issue and will bring it to finality. I will introduce new legislation very soon dealing with the issue of EROs and I look forward to the response of Opposition Members to it.
With regard to the minimum wage, it is important that we have a framework on wage policy. We must not deal with it in isolation. On that basis the minimum wage issue is being evaluated. The work and research on the issue is ongoing and the minimum wage will be taken into consideration in the context of overall wage structures and wage policy. This work is being supplemented by Forfás.
Our party has called for a freeze of local authority charges. I noticed the Taoiseach commented on this issue recently as well. Has the Minister held consultations on this issue with local authorities and county and city managers? It is an enormous cost burden on small businesses but, having been a member of a local authority, I am aware that it can be a soft touch for local authorities at budget time. Has the Minister conveyed her views? Does she have concerns about this? Has she conveyed the views of small and medium enterprises?
I have met the local authority managers and discussed this matter with them. I indicated that businesses are of the view that they must reduce their costs. As a former local authority member as well, I appreciate that financing local government is difficult but rates are a huge issue for businesses and their sustainability. The Minister for the Environment, Heritage and Local Government, Deputy John Gormley, indicated last year that there should be no increase in rates for businesses. Unfortunately, not every local authority abided by that.
He cut local government funding.
The overall issue of tax policy, particularly for financing local authorities, will have to be dealt with once and for all so a final determination can be made. Work to examine how that can be done is ongoing by the Minister for Finance and the Minister for the Environment, Heritage and Local Government. I met with the city managers and I will meet them again shortly. I appreciate their difficulties but there must be an equal appreciation of the tax burden that falls on the small and medium enterprises.
Perhaps the Minister for the Environment, Heritage and Local Government could increase the local government fund.
That concludes priority questions. We will now proceed to other questions.
