Gerald Nash (Louth, Labour) | Oireachtas source

Amendment No. 14 seeks to ensure that businesses will be allowed sufficient time to plan for any adjustment proposed in the national minimum wage. I am fully supportive of the view that any increase in the minimum wage has to be done in an orderly way so that companies can prepare, in a timely fashion, in terms of their costs, business planning and so on.

It would be opportune, at this point, to remind Deputies that the ESRI, in its 2006 analysis of the last Labour Court recommendation proposing an increase to the national minimum wage, concluded that adjusting the minimum wage by a substantial amount on an irregular basis with lengthy gaps between increases, as has happened in the past, is more likely to have a detrimental impact on employment and to contribute to uncertainty for employers and actual and potential employees than regular, smaller and fairly predictable upratings. A significant benefit of the establishment of the Low Pay Commission concept is that in the future the national minimum wage rates will be assessed annually and, therefore, where they occur, any adjustments in the future will be incremental and, almost by definition, less disruptive for businesses rather than the big step changes that we witnessed in the past, and that were criticised by the ESRI in its report.

The deadline of 15 July, as it was, and the small adjustment that I shall make on Report Stage, in terms of the date for submission of the commission's recommendations, was designed specifically to allow time for full consideration of any change, or any proposed change, to be made in the context of the budget, for example, and how that would interact with budgetary considerations around tax, social welfare and business planning, and to provide for any adjustment in a planned and structured way. Consequently, this very structure achieves what the Senator is trying to achieve by the amendment. I am satisfied that there will be sufficient lead-in time for businesses to plan for any adjustment. I recognise the spirit and intent in which the amendment was tabled by Deputy Calleary and put forward by Deputy Keaveney today. However, I cannot accept the amendment because I believe it is unnecessary given the new structure that we are putting in place and the timeline that we envisage.