Ms Patricia Callan:

To deal with profit-sharing first, we certainly noticed a trend among members that all pay increases are related to the profitability of the business. We still have 0% inflation. Inflation has not increased since 2008, so most businesses are adopting the approach that, essentially, it will make decisions around it doing well if it does well. On profit-sharing in the traditional sense, a cash based profit-sharing scheme is taxed in exactly the same way as income tax. We need more innovative employee share option-type models. Revenue and the Department undertook a consultation last year but in the Budget Statement last year it was kicked to touch until this year. This is particularly an issue for tech-type startup businesses, where highly valued employees are being asked to take a big gamble by going with a startup to begin with but they have no potential to benefit on exit if the business is successful.

More innovative measures are needed in order for these startups, which may not be able to afford €100,000 salaries, to attract talent. This would help certain sectors of the economy.

A very interesting finding of our most recent conditions of employment survey was that during the recession, people became much more focused on benefits. We have seen stark increases in the number of small companies paying, for example, maternity and paternity leave top-up, health insurance and so on. Again, it is not necessarily just a matter of basic pay. This is all about building loyalty and engagement, rather than shopping around, and how people feel in the workplace. We have certainly seen a move in this regard as well.

On the broader commercial environment aspect, business costs are the biggest issue, whether it is labour, insurance, energy, commercial rates or whatever else. It is great to hear that the committee is considering this next. The capital investment aspect is also massive. I know the Minister for Public Expenditure and Reform, Deputy Donohoe, is planning to bring forward the mid-term review of the capital investment plan. If we do not get broadband, do not build out our roads and do not get our infrastructure right, we cannot benefit from any potential increased investment. These are becoming huge blockers, particularly to activity in the regions. Dublin's economic activity accounting for half the entire GDP of the economy is not good for anyone. London is about 20% of the UK's economy, most capital cities are 8% to 12% of the country's economy and our figure is 45%. It is unsustainable and a very significant issue.

Regarding the taxation side of things, matters such as the capital gains tax, CGT, incentive for entrepreneurs and PAYE are definitely important. I attended a meeting this morning at which public procurement was discussed. We need to get our act together on public procurement and understanding how to get small businesses into that spectrum. That would be very helpful.