Dáil Éireann Debate, Tuesday - 2 October 2012
45. Deputy Mattie McGrath asked the Minister for Jobs; Enterprise and Innovation if he will comment on the views of the Small Firms Association that proposals to pass on sick pay costs to the employer will cost jobs and restrict future recruitment; the steps he has taken to ensure that such jobs are protected [42021/12]
View answer46. Deputy Dara Calleary asked the Minister for Jobs; Enterprise and Innovation if he will respond to the continuing concerns of thousands of small businesses here regarding the Minister for Social Protection's proposal for a mandatory sick pay scheme; if he has carried out an impact assessment on the effect that a mandatory sick pay scheme would have on small and medium enterprises in terms of additional costs and impact on employment; and if he will make a statement on the matter [41822/12]
View answerI propose to take Questions Nos. 45 and 46 together.
Earlier this year, the Minister for Social Protection, Deputy Joan Burton, who has policy responsibility for the sick pay scheme, held a consultative meeting to discuss potential changes to the scheme in Ireland. The meeting was held in the context of the growing cost of, and dependence on, State-funded sickness benefit schemes and the need to examine ways to address these issues.
I have received a number of representations from employers' bodies expressing concerns that a statutory sick pay scheme could add to the costs of doing business and impact on job creation. I am also aware of the views of the Small Firms Association on the matter. These submissions have argued that absences in the private sector are already low by international standards and by comparison with the public sector. They have also pointed to the increased costs that would be involved, particularly for smaller employers. These submissions have also been sent in as part of the consultation phase.
Any formal proposals for changes in the sick pay scheme would be a matter for the budgetary process, which will be considered in due course by the Government, taking all factors into account. All Ministers are aware of the need to create a supportive enterprise environment in order to facilitate economic recovery and achieve the objective of having 100,000 more people at work by 2016, as committed to the action plan for jobs.
In our action plan for jobs, we seek to make reforms that improve the competitiveness of enterprise and I am aware of the dangers of any policy that could be seen to damage that competitiveness.
Any formal proposals for changes in the sick pay scheme would be a matter for the budgetary process, which will be considered in due course by the Government, taking all factors into account.
All Ministers are aware of the need to create a supportive environment to facilitate economic recover and achieve the objective of having 100,000 more people at work by 2016, as committed to in the action plan for jobs.
We all share the Minister's wish to improve the competitive nature of enterprise. The difficulty with the proposal is that the Minister for Social Protection has form. Last year, she pushed through substantial changes to the redundancy rebate payment system. She justified this on the basis of the argument that large companies can afford to make the payment. Nobody disagrees with that but when I asked for a breakdown of the payout from the redundancy fund over a number of years, I was told by the Minister's Department that the figures were not available. Therefore, the Minister did not know how many large or small companies were involved. She made the decision completely ill prepared. I fear she will do the same again. She clearly does not like the business sector and has, since she entered her Department, produced a range of policies that are anti-business. We depend on the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, to defend the business sector against this.
The Minister, Deputy Richard Bruton, referred to the SFA. Its figures suggest that 88% of businesses will be affected by cash flow changes if the Minister for Social Protection, Deputy Burton, proceeds with her plan. Some 69% of businesses said it would restrict recruitment. Despite all the talk of job creation and the action plan, the proposed measure would restrict the creation of new jobs. Some 61% of firms indicated the proposal may lead to job losses. The decision is in the Government's court and it could have a negative impact on jobs.
In case the Minister for Jobs, Enterprise and Innovation would like us to believe employers do not pay their share he should note that in 2010, employers paid €5 billion towards the social insurance fund. This is 75% of the total contribution. Does the Minister agree that €5 billion is a very substantial contribution from employers generally towards the fund, and that increasing the contribution will, as said by the SFA when reflecting the views of its members, potentially add to the unemployment problem and hamper cash flow within companies?
Deputy Calleary knows that budgetary decisions are collective decisions taken by the Cabinet. There is a consultative process and the Minister is open to consultation and giving groups the opportunity to make submissions. The groups have made submissions which, as the Deputy knows, signal that within small businesses, the absence rate is but a little over 2%. This is contrasted with the figure for the public service, where it can be 5%, on average. Clearly, there are germane issues. The Minister for Social Protection, Deputy Joan Burton, is concerned about the drift into long-term reliance on sickness benefits. This is an important policy issue and we need to have a debate on how the problem can be contained.
These matters will all be weighed up by the Government when making decisions. I agree with the Deputy that we can ill afford anything that would add to competitiveness problems for business. We need to remain competitive and to solve many issues. We need to see emerging from this debate a sensible set of proposals that can restore our economy and public finances.
We all agree there is a danger of dependency on illness benefit but the Minister is still dodging the question on the rate in the public sector by comparison with that in the private sector. Is the problem far greater in the former than in the latter? In asking this, I am not pitting one against the other but pointing to the nucleus of the problem.
The Minister for Social Protection, Deputy Burton, stated the proposal will not affect those businesses with fewer than 100 employees. Can the Minister for Jobs, Enterprise and Innovation confirm this? While I know he cannot comment on budgetary proposals, it seems many of his colleagues around the table were commenting on another proposal from the Department of Social Protection, namely, that on child benefit. I ask the Minister for Jobs, Enterprise and Innovation to indicate that he, as Minister responsible for jobs and business, will fight for the interests of businesses against a Minister who clearly does not care about the business community.
Decisions by the Cabinet will be taken collectively and we will consider the evidence. No Minister comes to the table with a view that is closed.
These issues will be debated and we will take decisions in due course. This is the approach that any Government must take.
I am acutely conscious of the needs of business to remain competitive. We must promote employment and be wary of anything that would add to its cost. We need to approach this issue collectively following the assessments of the evidence that is submitted. This is the Government's approach and a collective decision will be taken.
