Mr. Fergal O'Brien:

I thank the Deputy. We look at the individual measures that are adding to this. I refer to the policy measures rather than the general cost environment. We have additional days' leave, statutory sick pay proposals, significant increases in the minimum wage towards a living wage and the introduction of universal pensions. All of these on their own have considerable merit and we support the vast majority of them. It is very important that these supports in our economy are done in the right way and that we are protecting workers in the right way.

We have several challenges. One is that the cost burden, which we estimate to be 9% of labour costs on average, is predominantly going to hit small and medium businesses. Most of our larger companies have sick pay schemes and pensions but they do not have a high share of minimum wage workers. On the other hand, SMEs will be significantly exposed. The challenge we have is that all of these measures are being introduced in a very concentrated window. Hence, we have significant wage pressure, increasing costs and policy measures that are adding considerably to the cost of doing business and the cost of employment but, crucially, they are disproportionately affecting the SME economy. This is the core of our concern.

With regard to what we think we need to do, as I mentioned we have a surplus in the national training fund. It is likely to touch €1 billion this year. The most recent numbers we have are for last year, when it was just short of €900 million. It will head towards €2 billion by 2025. To us it seems unconscionable that this is employers' money going into a national training fund and we cannot seem to spend it. Our suggestion is to find a way to alleviate the pressure on the SME community and help them with the transition. We want these measures in our economy and in our labour market but SMEs should be helped with the transition. When all the measures come together, it will be far too much and it will sink many. Let us get that money out to those businesses, particularly SMEs, in the form of training vouchers to support productivity. It seems such a missed opportunity that we are accumulating a surplus when we have such skill shortages and we have productivity and competitiveness challenges. We need to do much more on upskilling. I would love to see the committee put some focus on the national training fund, where the surplus is going and how we can put it to work for the economy, for vulnerable employers and, crucially, for employees who need training.