Peadar Tóibín (Meath West, Sinn Fein)

Go raibh míle maith agat, a Cheann Comhairle, as an seans bheith ag labhairt anseo agus ba mhaith liom mo bhuíochas a thabhairt don Technical Group freisin.

Many Members on the seats opposite would have entered Government with the view of being involved in evidence-based policy development. Unfortunately, however, that noble idea was jettisoned very quickly after entry to government. As Members will know, a report was commissioned - the Duffy-Walsh report. This states early in its content: "We have concluded that lowering the basic JLC rates to the level of the minimum wage rate is unlikely to have a substantial effect on employment", and goes on to state, "We have investigated the size of the wage differential in some detail and do not find evidence of substantial wage premiums". The report states further, "Even if we err on the side of the strand of literature that finds the largest negative effects from minimum wages on employment, we should note that the results imply that cutting minimum wages lowers total earnings of low-wage workers and has potentially important distributional consequences".

During an earlier debate I asked the Minister, Deputy Bruton, if he intended that this action would lower wages; he said it would do so. I asked him whether he had any evidence to show that lowering wages would actually increase the number of jobs. I paraphrase the Minister, who said there was no hard evidence that extra jobs would be created as a result of this policy. He stated he "believed" jobs would be created. I also spoke to the Minister on poverty issues. Social Justice Ireland stated there are 100,000 working poor in this country. Given the so-called reforms of the JLCs will affect those on the margins of poverty, any drop in their wages must push more people into poverty. I asked the Minister how many people would be pushed in this way; he replied that he did not know. Here, evidence-based policy development is being thrown out and replaced with so-called belief-based policy development.

There is no doubt that if the wages of certain people were lowered certain employers might be able to employ more employees at any given time. Nor is there doubt, given the severe strain particular businesses are under, that they would jump or grab at any decrease in their costs, as a drowning person grabs at a life raft. It is important, however, to look at the net effect that will be brought about by this policy, especially when one understands it will affect up to 300,000 people. When that many people are affected it is not good enough that a policy be based on intuition alone. When it pushes real families into poverty it is not good enough that policy is based on hunch alone.

The reason small businesses in this State are on the floor is that demand has been severely punctured by four years of continuous austerity. The money in circulation in this State has reduced and therefore there is less money to go around and we are in what is called a debt trap. Every year, the Government cuts back to pay off private debts and every year the economy shrinks so that the following year it is less able to pay off those debts and must cut back further. At some stage the Deputies and Ministers on the far side must gain the guts necessary to change this policy and provide a real Keynesian stimulus to the economy. The fact of the Labour Party's involvement is very difficult to understand. It is important to remind people that the average JLC worker earns about €18,000 while the average Deputy earns five times that amount. The average Minister earns, or at least takes home, ten times more than the average JLC worker. It is very difficult to understand the effects these cuts will have on the average JLC worker unless one is on the same wage. It is clear that some public sector workers and professionals in sheltered sectors who are paid hundreds of thousands of euro remain untouched by the Government's policy in this area. When Fianna Fáil, Fine Gael and the Labour Party decide to make cuts, why do they start on each occasion with the most vulnerable individuals who are living on the edge? When Opposition Deputies criticise this approach, we are shouted down by shriller and shriller Labour Party Deputies, especially backbenchers, who are increasingly sensitive about the moral compromises they have made in recent weeks. I ask the Government to take serious heed of workers in the State who are providing an enormous service for their employers. Government Deputies should understand that if they take money from those who spend all of their money, all they will achieve is a further reduction in the amount of money in circulation and the GDP of the State. Impím ar na Teachtaí ar an taobh eile smaoineamh ar na hoibrithe ar a bhfuil siad ag gearradh siar agus a meoin ar an ábhar seo a athrú.

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