Finance Bill 2021: From the Seanad

In accordance with yesterday's Order of Business, this debate must be brought to a conclusion within 30 minutes.

The Dáil went into Committee to consider recommendations from the Seanad.
Seanad recommendation No. 1:
Section 70: In page 138, line 23, to delete "1 December 2021" and substitute "1 February 2022".

The wage subsidy schemes, namely, the employment wage subsidy scheme, EWSS, and its predecessor, the temporary wage subsidy scheme, TWSS, have been a substantial and key part of the Government response to the pandemic. The EWSS has played a central role in supporting businesses, encouraging employment and helping to maintain the link between employers and employees. Since the introduction of the scheme, it has reflected an economy-wide policy that operates across all sectors. It is widely acknowledged as a very successful policy intervention that has provided vital support to businesses across the country during a very challenging time.

The overall support provided for the EWSS to date, that is, up to 9 December, amounts to more than €6.6 billion, comprising direct subsidy payments of €5.73 billion and PRSI forgone of €902 million to 51,700 employers in respect of some 696,900 employees. As part of budget 2022, the Government agreed the EWSS would remain in place in graduated form until 30 April 2022, with these arrangements provided for in section 70 of the Finance Bill 2021. It was proposed, as part of the gradual unwinding of this temporary emergency measure, that the EWSS would revert back to its original two-rate structure from 1 December 2021. However, as announced on Thursday last, it has been decided to maintain the enhanced rates of EWSS subsidy for a further two months, namely, December 2021 and January of next year.

Consideration was given to providing targeted support for businesses that are subject to the latest public health restrictions using a modified version of the Covid restrictions support scheme, CRSS. However, on further consideration and analysis of the available data, it proved to be administratively very complex to design such a scheme and it would not have been possible to have it operational ahead of Christmas as had been intended. Instead, maintaining the enhanced rates of subsidy under the EWSS for a further two months offers a relatively more efficient and effective way to support affected businesses in the immediate term. This will give certainty to businesses when they need it most. It will assist businesses during the Christmas period, especially those in certain sectors, such as the hospitality sector, that may be operating at lower levels than anticipated due to recent public health restrictions.

I am pleased to advise the House that Revenue has confirmed it is possible to pay the enhanced rates of subsidy to businesses in a timely manner. All eligible EWSS payroll submissions received from last Friday onwards will be processed using the enhanced subsidy rates. In addition, Revenue has confirmed that it is currently identifying any relevant payroll submissions that may require a top-up to bring such payments in line with the enhanced rates, and payments will be made to employers shortly thereafter.

The consistent approach of the Government has been that there will be no cliff edge to the support under this scheme. At the same time, it is clear the EWSS cannot run indefinitely, nor is it sustainable to continue with the enhanced rates for a prolonged period, given the very substantial cost to the Exchequer. As such, from 1 February 2022, the parameters for EWSS as announced on budget day will apply. For February 2022, a two-rate structure of €151.50 and €203 will apply. For March and April 2022, the final two months of the scheme, a flat-rate subsidy of €100 will be put in place. The reduced rate of employers' PRSI will no longer apply for these two months. Businesses availing of the EWSS on 31 December 2021 will continue to be supported until the scheme concludes on 30 April 2022.

Since the onset of the Covid-19 pandemic, the Government has adopted a proactive and dynamic approach to supporting businesses and individuals insofar as possible during this challenging time. We will continue to monitor health and economic developments closely. I am pleased to confirm that these recommendations were approved by Seanad Éireann last night. I commend them to the Dáil.

We support the extension of the EWSS and the CRSS schemes. Are we dealing with all the amendments together?

Yes, but I will be putting them individually-----

The debate, though, is a short one.

The debate is as the clock tells us it is.

We support these schemes for the obvious reasons. The pandemic continues to impact particular sectors of the economy. We should remind ourselves that these are the ones that have been hit the hardest and most consistently right from the beginning through to now. Everybody has been affected by the pandemic in one shape or form. To be honest, the past two years have been pretty grim. For some people, the impact suffered has been psychological, social, to do with their children, etc. For other people, however, the experience of the pandemic has brought a repeated financial and economic hit in addition to those broader health, psychological and social impacts. It is absolutely right, therefore, that we should continue the supports, such as the EWSS, to maintain the relationship between employees and their employers and to ensure that these support schemes can cover some of their ongoing costs.

It is not enough to do that, however, given that the Minister is tabling last-ditch amendments, and he is correct to do so, in respect of the businesses that benefit from these schemes. In that context, why is it that the people who have been short-changed throughout this entire pandemic are, yet again, the ones primarily affected in this regard? I have had repeated engagements with the Minister, the Minister for Social Protection, Deputy Humphreys, and the Minister for Public Expenditure and Reform, Deputy Michael McGrath, concerning, primarily, the plight of the self-employed and what I think are called ancillary workers in the context of the EWSS. These are people who are considered ancillary but who are impacted by the beneficiaries of the EWSS. They are excluded. Critically, tens of thousands of self-employed people are not getting the support they need, even though they have had to fight the hardest and have benefited the least from the supports that have been available. Why are last-ditch efforts not being made to ensure that they also have supports going into Christmas?

Maybe this perspective has not got through to the Government, or perhaps it is deliberate. I made this appeal to the Minister for Public and Expenditure and Reform last night. I am going to keep doing it until the last day of the Dáil in order to try to get some movement on this issue, or at least some answers and clarity. Thousands of people are experiencing confusion, anxiety and concern regarding whether they are going to have any income, what level of income they may have or whether the income they will be given will be sufficient to support them because their work has collapsed as a result of Covid-19. Those people do not benefit from these schemes. They had previously benefited from the pandemic unemployment payment, PUP, and some of them also benefited from the music and entertainment business assistance scheme, MEBAS. I do not understand why last-ditch moves or amendments in this regard are not also being rushed through the Dáil this week as well. I just do not understand why that is not happening.

In case the Minister is not aware of this situation, as we speak, hundreds if not thousands of musicians, entertainers, taxi drivers and people involved with the night-time economy are being refused PUP. We were told last week that they would get PUP, but they are being refused it. They are receiving letters stating that if they cannot show that they had four weeks PRSI contributions in the week before 7 December, they will not be eligible for the payment. That is a ridiculous request to make of the self-employed because they do their taxes at the end of the year. By definition, they are not getting any support from these schemes even though their work has collapsed. Other people are still on the PUP. The Minister will remember that there are different cohorts in this regard because people were being phased off the payment, from €350 down to €250 and then down to €205. They were finally forced onto jobseeker’s payments. If people had signed off, and then, on 7 December or after, went back on the PUP, it is possible for them to get to €350 if their applications are not refused on the basis of this PRSI contribution requirement. Theoretically, however, it might be possible for people in that situation to get the PUP.

People who were on the lower rate because they were being phased down the PUP payment rates will not now be able to apply for the higher rate, even though the lower rate was phased down on the basis of the fact that the amount of work it was possible for people to do and the level of income it was possible for them to make was rising when that happened. That was the whole principle behind those changes in the payment. All those people, though, have now seen the additional income they could earn because of the lifting of restriction collapse again overnight. I am getting desperate calls from drivers telling me that all the night-time work is gone and that they are waiting for four and five hours at the airport, but there are no fares. All the office workers are being told to stay at home, so all that kind of work is gone as well. It is possible that further restrictions are will be imposed at the end of this week, which could impact their ability to work even more. There is some shopping activity and some people are going to work around town, so it might be thought that there is loads of work. There is not, however.

The situation is even worse for musicians, because their work is just gone. All the gigs they expected to have in December are not happening, but they are being asked in interviews relating to qualifying for social welfare payments if they can prove that they have lost income. How exactly are they meant to prove that? Do they have to get letters from all the people with whom they had arranged gigs in December and then bring them to the Intreo office if they can get an appointment over the next week? I would say there is a fat chance of that happening. It is ridiculous stuff.

Let us remember what the Government said at the beginning of this crisis. It stated that the PUP would be given to everybody because everybody is impacted and the eligibility criterion for the PUP then was that people’s income and ability to earn had been significantly reduced or had gone. We did not give people loads of hoops to jump through. What we are doing now, though, is refusing people's applications or giving them multiple hoops to jump through, which they cannot possibly do before Christmas. It is grossly unfair. I reiterate that these people who are facing this situation a week before Christmas are the same people who have been repeatedly hit the most often and the hardest right from the beginning of the pandemic. Yet they are now being hit again in the week before Christmas. I appeal on their behalf to the Minister to do something before Christmas for the people in these categories, who, self-evidently, have been impacted by the latest round of health measures and by the arbitrary date concerning when the measures were brought in, namely, 7 December. It is ridiculous. Many people scaled back their social activities and outings last week-----

The Deputy can continue, but the time is limited and there are other speakers.

I know, and I want to be fair to others. I just want to get this point across because this is my last chance to do so. Then I will stop. The arbitrary date of 7 December is ridiculous because much of the work for musicians collapsed in the weeks before that date. This arbitrary cut-off means that people impacted on or after that date are okay but anything that happened before then does not count for those people who apply or who were on something else. I am asking that the PUP be given to these people who have self-evidently had their work and incomes hit or reduced and that this PRSI contribution requirement be taken out of the qualification criteria because it does not apply to the self-employed. That is what they are being told is required, however. In addition, the MEBAS scheme for musicians will apparently not be reviewed until January 2022. Can we put some money into that scheme now, because the ongoing costs for that cohort of people are continuing even though there is no work for them?

Two more speakers have indicated. I call Deputy Mairéad Farrell.

I will speak to the three recommendations and I will keep it brief so that there will be lots of time for others.

Recommendations Nos. 1 and 2 provide for the extension of the existing rates of the EWSS until the end of January 2022 in response to public health restrictions which will impact the footfall in and revenue of businesses in certain sectors in the coming months. The hospitality sector is especially impacted. This extension is a common-sense measure and one that Sinn Féin called for on 30 November. The Government decided on the measure prior to the subsidy rates being cut on 1 December. This delayed response is to be welcomed. I note that the Minister performed a U-turn in respect of reversing the wage subsidy cuts, having announced on 3 December that he would provide targeted supports. Those announced proposals were consigned to the dustbin, with an admission that they could not have been implemented with the necessary speed. This is evidence of a lack of planning in the Department, particularly regarding the tailoring of supports over time to those sectors most impacted.

What we have now are economy-wide supports for what is, for the most part, a sector-specific issue. I remind the House that my colleague, Deputy Doherty, submitted an amendment 16 months ago to alter the EWSS in order that different rates of payments could be applied to different sectors.

This proposal was rejected on the grounds that one sector could not be prioritised above another. This justification was somewhat undermined by the roll-out of the CRSS months later, which only provides support to consumer-facing businesses and was therefore sector-specific for all intents and purposes. I ask the Minister and his Department to examine the possibility of tailoring the wage subsidy scheme to provide tailored supports for specific sectors. We will be supporting this recommendation given its overall objective to support employment.

Recommendation No. 3 provides for the extension of the CRSS. Given the impact of the latest public health restrictions on the night-time and experience economy this is a common-sense recommendation that Sinn Féin will be supporting to ensure that supports to that sector are provided to protect employment, businesses and livelihoods.

The wage subsidy scheme has helped every other business to go through a very hard time. However, I have been on to the Minister's office more than once about the 18% of the hotel industry that does not qualify under the scheme because they cannot register before 31 December. That means they have over 70% of their earnings compared to the 2019 accounts.

The hotel industry has not only lost November and December but its worst months are January and February. That means they have lost four months. What they needed to make in November and December was to carry them through January and February so they would be ready for the tourism season in March and for the rest of the year. The Minister is telling me he cannot reverse this and it cannot be implemented. I am asking him to put in an amendment. Anyone who was on the wage subsidy scheme from this year should qualify to go on to it for next year. It is not new applicants but existing applicants who have been availing of the scheme and were interfered with from the point of view of income for 2020.

I said I would give the Minister a figure so he might be able to go back and find the funding. This was costed at €7.5 million to save 11,000 jobs on the wage subsidy scheme for January and February of next year. While the Government launched the stay and spend initiative to great ceremony, it was unsuccessful. This initiative was targeted at the hospitality industry and the Government set aside €250 million for this scheme. As only €300,000 was claimed under that scheme, that means there is €249,700,000 left that was put aside for it. I am asking for €7.5 million to save 11,000 jobs on the wage subsidy scheme for next year. They are not asking to go on it for November and December this year. They are asking to go in on 1 January because they do not qualify under the Government's scheme. The hospitality sector has been hit twice. It was hit in 2019, 2020 and 2021. It needs the help. The Minister has to understand that January and February are when they have the lowest income coming in. They make their money in November and December. With the restrictions that have been put in place, and I believe on Friday the Government is looking at more possible restrictions, these hoteliers will not survive. That means we have 11,000 jobs that could end up going on the PUP or on the live register and that might never be returned to hospitality.

I am asking the Minister to protect and save the hospitality industry, including the musicians who need to be subsidised as well. It is a big cohort. I urge the Minister to go back to the €250 million he put aside for the stay and spend initiative and to invest in the music and hospitality industry. In my account, there is €249,700,000 left. That will save the hospitality sector and the music industry for the first couple of months next year.

The Deputy makes a valid point. As the Minister is aware, I have been raising the issue of the moneys that were allocated to the stay and spend scheme and that have not been spent this year for a variety of reasons. The scheme itself was not a bad idea but because of the conditions that pertained for much of this year, it was simply not possible for it to operate in the way that it ought to have. I understand a recommendation was made in the Seanad yesterday to that effect. It is something the Minister might consider.

The employment wage subsidy scheme and temporary wage subsidy scheme were extraordinary interventions by the Government. It is to the Minister's eternal credit and the credit of the last Government that had hold of the ball when we were in that very difficult situation in March 2020. Great credit is also due to IBEC and the Irish Congress of Trade Unions for assisting in the development of the scheme. It was phenomenally successful, keeping people close to their employers and employed at a time when they could easily have lost their jobs. The scarring effect of losing a job at that time would have been inordinate for society and the economy.

The Minister knows that I have been arguing from the get-go for very strict social, economic, labour and environmental conditions to be attached to the disbursement of billions of euro in taxpayers' money to businesses that were relying on these schemes to keep people in work. Despite the various calls I made, amendments I proposed and questions I raised in this House, no such conditions were attached. I said consistently that we were outliers in the European context in attaching no social, economic or labour conditions whatsoever for qualification for the scheme outside of some minor thresholds applied by the Revenue Commissioners.

The Minister will have read the front page of The Irish Times this morning and the comments made by his colleague in government, Deputy Jim O'Callaghan. He expressed his concerns that a company that paid €1.8 million in dividends also received €1.8 million in wage subsidies through the Irish taxpayer, by coincidence. The interests of the taxpayer have not been looked after in that respect. No conditions were attached. When I was calling for conditions to be attached to the EWSS and previously the TWSS around no lay-offs, payment of no bonuses or dividends and in respect of companies registered in tax havens but operating here, I was given a deaf ear. The proposals were not entertained. How did this morning's article sit with the Minister? Does he regret not attaching conditions that would have prevented this kind of behaviour from happening in the first place? Is it something he intends to resolve?

I refer to an issue raised in the Seanad yesterday regarding the hotels that opened in the latter half of 2019 but prior to 1 November. Hotels that opened on or after 1 November 2019 are allowed to use their pre-pandemic projections for 2021 and 2022 as the base for comparison with their actual turnover in 2021 and 2022 in establishing whether their turnover achieved the 30% reduction. Due to an anomaly within the rules, however, hotels that opened in September and October 2019 are forced to use the minuscule turnover they achieved immediately after opening in 2019 as the base for comparison with their 2021 and 2022 turnover. Obviously there is not a 30% reduction in that. These hotels have been cut off since last September and are precluded again by the changes we are considering here. I ask the Minister to look at this specific anomaly. I think we are talking about five or six hotels around the country in total. It has a devastating impact on the employment levels in those hotels, particularly from 1 January next.

I welcome the support from all who have spoken for the recommendations that have been made to the Dáil this evening.

I also welcome colleagues' general support for the EWSS and the very positive role it has played in the preservation of employers and the maintenance of work during such a difficult period of the pandemic in our country.

I will say a few words about the various issues raised by the Deputies this evening. As Deputy Boyd Barrett acknowledged on other occasions, we have, through the EWSS and CRSS, done so much to try to bring so many into a safety net to help them when the disease is causing harm. I have acknowledged to the Deputy on a few occasions that there have been groups of workers who have been outside the scope of these schemes. With regard to the CRSS, the Deputy raised with me the circumstances of the many businesses that do not have a premises. With regard to the EWSS, there were some workers who were not able to benefit under the programme as constructed. I will raise the issues the Deputy has emphasised in respect of musicians and others working in our night-time economy. Their plight is the reason we have reopened the PUP. I hear the Deputy's point that those on the previous rate of PUP are now on a lower level than those who joined more recently. I understand that issue but, until the latest public health restrictions, we had been making so much progress on trying to get people back to work and reopen our economy. I am aware the Department of Social Protection is doing its best to handle this issue as sensitively as it can. I hear the Deputy's point regarding the date we picked, but it was picked because it was the one on which the public health guidance was issued and that did have a bigger effect on the economy. I understand the Deputy's point, however. While I hope the arguments I am making make sense, there are people who are not eligible according to the dates and programmes we are discussing this evening. Therefore, I will discuss this again with the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, Deputy Catherine Martin, to see where we stand on sectoral schemes that can make a difference for those affected by the issues the Deputy is raising. Those schemes have worked well in the past.

I thank Deputy Farrell for the support she offered tonight. It is welcome to hear Sinn Féin offering support for a more tailored approach to how we will implement wage subsidy programmes in the future. In recent weeks some of the challenges that will be involved in doing this have been demonstrated to me again. The Deputy's support will be recognised by me when implementing the changes in 2022.

On the points made by Deputy O'Donoghue, he and I have discussed this issue, including today, when he contacted my office on this matter. I understand that there are some companies and hotels that are ineligible for the scheme, but I must emphasise to the Dáil the huge amount of support the Government has provided to the hospitality sector because of the value we attach to the contribution it makes to our economy and society. The hospitality sector alone has received €1.5 billion through the EWSS since its introduction. It needed it. Under the CRSS, businesses have received €426 million to support them at a time of such strain.

The challenge I face is that, regardless of the level of business performance that I fix to allow entry into the scheme, there will be some companies that do not reach it. A company that can show a decline of 30% or more for this year by comparison with 2019 is eligible to enter the CRSS, but I accept that some companies are just beyond the thresholds that are fixed and therefore unable to participate. In a scheme of this scale, and with so much money going into it, we need to have entry points. Without entry points, we would not be able to focus the huge amounts of money where they are needed the most. It would raise the most difficult issues regarding how to get out of this.

I am going to consider some of the issues that Deputy Nash raised with me in the past and that have come to light again today, but I emphasise that the vast majority of companies have needed to avail of the EWSS, as the Deputy acknowledged. Some companies that found out they did not need the scheme as much as they thought they would returned the money to the Revenue Commissioners. I recognise that and thank the companies in question. I ask other companies to consider the practice that their peers have engaged in.

The time permitted for the debate having expired, I am required to put the following question in accordance with an order of the Dáil of 14 December: "That Dáil Éireann hereby accepts all the recommendations of Seanad Éireann to the Finance Bill 2021.”

Question put and agreed to.

A message will be sent to the Seanad acquainting it accordingly.