Dáil Éireann díospóireacht -
Tuesday, 12 May 1998

Vol. 490 No. 7

Written Answers. - National Minimum Wage.

John V. Farrelly

Ceist:

158 Mr. Farrelly asked the Minister for Finance his views on whether the national minimum wage should be £4.40 per hour; the effect, if any, this would have on jobs and the economy; the amount this measure would actually cost the State if the minimum wage was set at £3.80 per hour and the Government were to increase the tax-free allowance for low paid workers from its present £77 per week to the equivalent that would bring it up to earnings of £4.40 per hour; his views on the role the Government has to play in bringing about a fair and equal level of pay for many thousands of workers employed in small industries throughout the country; and if he will make a statement on the matter. [11171/98]

Minister for Finance (Mr. McCreevy)

Following the report of the National Minimum Wage Commission, an interdepartmental group was established by the Government to study the issues involved, including the economic impact, and to develop proposals and a plan of action. The group will report to Government on the matter as soon as possible.

As the Minister for Enterprise, Trade and Employment has stated, the initial rate should be struck in the context of negotiations on a successor to Partnership 2000. In this regard, the National Minimum Wage Commission has advised that the rate must take account of employment effects, the overall economy and the need to maintain our competitiveness.

The impact of a national minimum wage on jobs, the economy and the cost to the State will depend on the timing and manner of its implementation. If the general income tax exemption limit for single and widowed persons was increased to the level of earnings of £4.40 per hour over an assumed standard 40 hour week, and assuming apro rata increase of double that amount for married persons, the cost to the Exchequer is estimated at £945 million in a full year.

If instead, the personal allowances for single and widowed persons were increased to the level of such earnings, with apro rata increase of double that amount for married persons, the cost would be of the order of £2,400 million.