Marc Ó Cathasaigh (Waterford, Green Party) | Oireachtas source

I will pose a few questions of my own. I thank IBEC for the opening presentation and the more in-depth submission, which I found very readable and comprehensible. The format used was very helpful to me.

I will touch on that last point regarding increasing labour market costs first. I have a degree of sympathy as there have been a lot of changes with regard to labour market costs. The new bank holiday this year is one IBEC did not list. I have a certain sympathy although, in my opinion, all of those interventions were merited and worthwhile. I know the witnesses are speaking about smaller employers who do not necessarily have an office of ten people dedicated to this type of paperwork and I take the point that this will involve a lot of heavy lifting for them. Phasing the contributions in over a period of time and going from 1.5% to 3%, 4.5% and then 6% over the course of a decade does give the necessary lead-in time and breathing space for all of us to assess the impact it is having on employers with regard to their labour market costs. That is built in but I hear the request for employers to be given enough line of sight. We have heard that from a number of sources.

I will touch on that threshold of €80,000. It is interesting and this touches on what Deputy Ó Cuív was talking about. The top-up effectively amounts to tax relief of 25%. The witnesses have said that using a top-up rather than tax relief complicates or confuses matters. The committee has heard evidence that people understand the top-up better and that we are more likely to get buy-in in this way. The saving scheme that was there a couple of decades ago is a real case in point in that regard. People really understood the top-up. I believe they understand it a lot better than they understand tax relief.

On the point that the threshold of €80,000 is too high, do we have an idea of the expected penetration of auto-enrolment? When a couple earns above €49,000, they will pay tax at the 40% rate. If paying tax at that rate, you are 15% better off if you step out of auto-enrolment and into a contributory model. When it is said that we should lower that threshold, I wonder how many people we would actually be taking out of the net because I believe people will migrate fairly quickly once they are earning above a certain level of income. They will migrate to an occupational pension or something similar that will offer them better terms and conditions. Will the witnesses comment on that?

There has been a lot of repetition in different submissions. The point about Revenue is interesting. In a couple of the submissions, we have seen that question of whether we should have a CPA or whether it would be better for Revenue to step in. This committee would do well to investigate the implications of that in more detail. Something I have not seen in any of the other submissions is the communication and information piece outlined in the longer IBEC submission. It says that, given that employers and trade unions have a specific interest in auto-enrolment, it is important that they have an explicit role in the system. It suggests that the Labour Employer Economic Forum, LEEF, is the appropriate forum for that. I want to give the witnesses a chance to expand on that because I have not seen it suggested elsewhere.