Peadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

Some of the figures in Dr. Collins's presentation are quite startling, for example that the top two deciles earn over 50% of the direct income. Could Dr. Collins confirm another figure that is quite remarkable, that the top 20% of workers receive 25 times the share of the bottom 20%?

The issue being discussed here is low pay; sometimes when the issue is discussed with IBEC or ISME attention gets slightly diverted to those outside of employment. The challenge we have here is that there is such a problem with low pay in Ireland. I believe it is the objective and the responsibility of the Government to ensure that a person working full time can cover their full expenses in life. There is a difficulty if a wage fails to do that. I find that often in these discussions it is argued that low wages are good for competition but high wages are also good for competition and that logic affects the distribution of income. The fact of the matter is the competitiveness of the State is founded on all of its income and all of its pay; a flatter income gradient would be more beneficial for the competitiveness of the State because people who earn €100,000 are also competing with people who earn €100,000 in Britain.

Sinn Féin has been involved in bringing about a living wage in Belfast City Council. This cost Belfast City Council £21 per staff member per year and was accomplished with no increase in the rates paid by businesses, so it can be done if an organisation is determined to do it.

Mr. O'Brien suggested increasing the tax base while reducing the tax rates. That does work at certain points of the economic cycle; my worry is that it has proven to have the opposite effect at other points of the economic cycle. When there is contraction in the economic cycle, as there will be, we find that it has a procyclical influence on the process and sometimes has the effect of making the bottom end of the cycle more difficult for the economy.

We discussed FIS earlier, which to a certain extent is a subsidy; the State, in effect, is paying a subsidy to employers to pay workers. If that subsidy did not exist these individuals would not take the job because the job would not be worthwhile. Some of the people who are in receipt of FIS work for companies that are very profitable and do not need FIS. If IBEC believes in market forces, does it believe that certain businesses should have subsidies paid to them in this way? For example, I am aware that IBEC does not support large subsidies to farmers in a similar fashion year-on-year. If some companies do not need subsidies and others would not survive in the real market should the State be repeatedly paying them a subsidy?

It has been asserted that we are in direct competition with people in Britain as opposed to those in the Nordic countries. I do not fully agree with this; I believe we are probably in competition with all of those economies. It is those models which are most competitive that we should be aiming to converge upon. The difference between the minimum wages in Ireland and Britain has been mentioned but how does the purchasing power in Ireland compare to that in Britain? How can purchasing power be increased without increasing the minimum wage? One suggestion was to reduce the costs of public services; are there any other ways that could be done?