Ms Patricia King:

I thank the members for their questions. I might break it down into a few headings to address the questions as accurately as possible. First was the question of whether bogus self-employment is cheating, and the answer is "yes". We can then consider the questions on the amount involved.

As for potential loss to the State, members may be happy to know they do not have to rely on our figures. I suggest they look at the Comptroller and Auditor General's report from November 2018. I will match that with figures from the Central Statistics Office to give the committee an estimate of what it could be looking at in this regard. We have been going around the houses with this. I have been associated with the issue for more than 15 years, but the Competition Act that we got through took 12 years. Any such campaign is a long haul. The Comptroller and Auditor General said that a person on €100,000 who is paying tax and PRSI in the normal way would have a yield to the State of €44,600. The take for the State from a self-employed person would be €29,648. The take to the State for a person operating through a company and so on would be €29,900. The difference between a PAYE contributor and the self-employed or company person is €15,000 per individual worth €100,000. Let us consider one sector for example. I picked the sector that shows the biggest figures. I went to the CSO and asked it to prepare those figures specifically for this purpose, because I knew we were coming here and I wanted the figures this committee was going to hear to be as accurate as possible. The CSO did that, in fairness. The sector with the highest number of people who are self-employed with no employees is construction. This is a big indicator. If we take the €100,000 figure and the €15,000 loss per person, we can multiply it by 32,000 workers. It would not be entirely correct, however, to use the whole 32,000 because some people are genuinely self-employed with no employees. I married one of them so a few of those could be removed as engineers, architects and so on fall into that category. I always have to be careful when I say that because I usually have to go home. The 32,000 figure for self-employed with no employees, with a €15,000 difference if they were all earning €100,000, would be a loss to the State of €480 million. I do not have an accountant's background but it might be safe to divide that figure in two, so one is looking at a €240 million loss to the State just in one sector, in both PRSI and tax. This is not just a PRSI problem, it is also a tax issue. A Senator urged us to be stark and straightforward. By any standard, this is a potential huge financial loss to the State, in my judgment. I did not make up all of those good, solid indicators of figures; the Comptroller and Auditor General was bold enough to put this in the report. People have a strong respect for the Office of the Comptroller and Auditor General and what it does on behalf of the State. This represents one very strong indicator from just one sector.

I will move on and draw that into the question about public procurement. I am very glad that question was asked because it is something I have tried to raise many times but in certain quarters people look at me as if I have lost the plot or as though they do not understand what I am saying. I will give an example to the committee and will stick with the construction industry. If there is to be a big public procurement project as part of Project Ireland 2040, with lots of taxpayers' public money to be spent on something like roads, hospitals, schools and so on, it is essential to get it right. In the case of a big project with a donkey load of taxpayers' money to be put into it, I have asked what is there to stop the scenario I will now outline. A contractor tenders for a big job on the basis of the following criteria: all the workers will be directly employed; all the workers will be paid the rate for the job through the sectoral employment order, the legal basis for which was passed by the Houses of the Oireachtas; and the quantity surveyors or the people who put together all the figures put in the price to the State for doing the job with everybody on the project to be directly employed and everyone to receive the rate. This will be the cost to the State, and this is what the State would want to see happening. The contractor gets the contract, goes on site and the job starts to happen using publicly procured money. I would have a big question mark over whether all the jobs on that site are direct and whether all the jobs are paying the sectoral employment order rates. If they are not, the State has committed to pay this price for the contract to be concluded and the contractor will get all that money. What is the difference now and where does the money go when these workers are no longer employees and the contractor is not paying the PRSI? The contractor has charged the State for this and has charged the State for paying the workers the proper rate. I know of no mechanism for anyone to go out and check to see if this is the case in such projects, yet this has a big potential financial loss to the State if it is not monitored. When I say this, very few people actually take this on, but it is another feature. The members asked about the losses and in our judgment there are two major potential areas of loss that the State could put right if it had proper procedures in place. That is one piece.

I am taking the lead from Deputy Brady's questions because he touched on all the topics that were also raised by other members. The question was asked about if we are sufficiently resourced. This also ties into the question asked by the Chairman on the scope section. I will make a comparison. Reference was made to the contribution from the Department when its representatives appeared before the committee to answer questions, during which they spoke of the approximately 1,000 determinations and so on. If one considers the figures related to the activities of the joint investigations unit and the special investigation unit - the combination group the trade union movement sought to put together way back - when that investigation happened there were 5,017 interviews in one year in that sector. They got €60 million in tax back, 484 subcontractors were reclassified and 749 individuals were re-entered as employees. The Comptroller and Auditor General said that it was a 24.1% rate of misclassification and that there was a significant difficulty in that sector. If one matches this type of misclassification across all sectors, I rest my case with regard to productivity levels in that regard. The problem is that we are told there are 117 people and 17 members of the Garda attached to the whole investigation unit but to be fair to the scope section in the Department, we believe the resources are not there.