Matt Shanahan (Waterford, Independent) | Oireachtas source

I thank our guests for their presence here this morning. I have owned and operated a private business for many years, and I have to say that when I sit here and listen to some of the commentary, I wonder if I am living in the same country as other people. Whether anybody has acknowledged it here or not, we currently have full employment. In large part, workers have far more access and more rights now than employers have.

I will point out that in the recent round of pay bargaining, the cost of employment, particularly at the low pay end, has added €3,000 in general to the cost of low pay employers' PRSI. It has gone up now by almost €2,000 for employees on a wage under €440, and €2,500 on a wage over €440. On top of that, there is a range of additional leave entitlements, additional bureaucracy, statutory sick pay and other extensions to entitlements. We are killing the small business sector in this country. A lot of them who are tuning in here today will not understand what this conversation is about because they feel totally excluded from it.

I would say to Mr. Reidy that in his discussions about the need to transpose unions, he has not at any point referenced the existing pay gap between the public and private sector in this country. We are an outlier, other than the PIGS countries in Europe, in terms of the pay disparity. Mr. Reidy will know well the CSO report that was produced in October 2023, which highlights the pay disparity gap for small companies. It is €433, a difference of 62% between the average public sector pay and private sector pay for a medium company, and a disparity of €302 per week for a company employing between 50 and 250 people. For those in excess of 250, the large SMEs, they are closer to FDI and the public sector but there is a still a 9% pay disparity there between what we are paying the public sector. I ask what reforms we have delivered with regard to all of this. Deputy Brendan Howlin did a reform report back in 2014 on how public pay should be graduated. We have not addressed that. I do not see the reform that is there, and I think this is becoming a real bone of contention with regard to collective bargaining.

Just to tell the witnesses where wages are going, I spoke to a builder in recent days. He told me that he is paying his general operatives €22 per hour. That is the general unskilled labour rate. Even at that, he is struggling to recruit people, so that is the environment we are currently in.

Ms McElwee spoke about the high-level working group in LEEF, and how it is informing policy. I have asked a number of times that ISME be brought onto that working group because I do not feel that the voice of small business is being properly represented with regard to collective bargaining and the public pay talks.

I am highlighting the pay disparity with the public sector. I do not think the witnesses can speak about equity and fairness and be a representative of employer and employee rights without addressing that. I will also point out that our public sector pay bill for 400,000 workers is approaching €22 billion, I understand. That is, more or less, the same amount of money as we are taking in excess corporation tax at the moment. We are coming in for a reset in this country's economy, and I wonder when we are finished with all of this collective bargaining, what is it going to deliver?

I want to read something into the record that I got from a restaurateur yesterday. He is employing probably about 30 people. He has two restaurants in the south east, and I will not say where. This is what he sent to me as a quick note. He is very frustrated.

The cost of doing business has now become exorbitant. A relentless increase in red tape, wages, employer PSRI, auto enrolment, sick pay, extra bank holidays which nobody wanted, nothing on the credit side for my business. The energy subsidy scheme was a drop in the ocean. My electricity went up 123% and 109% year on year in two restaurants. My margin has gone from around 9% to less than 1% in two years. This year, there is an expected rise in costs of €100,000 per €1 million in revenue according to the Restaurant Association of Ireland.

He continued:

I am not going to invest anything in my business for the foreseeable future. I have to go to the bank now for a loan just for cash flow. I will not employ as many seasonal employees this year as before because it now costs too much. I have now turned to using QR codes, reduced operating hours and reduced menus, and I have order and pay at the table so that I can avoid wage costs. I have no problem with badly-run businesses going to the wall but the problem is that well-run businesses are closing down now.

That is the background in terms of the framing. I read the IBEC submission, and I would just ask Ms McElwee to report on two points. My own personal sense is that we need to work within the legislation that we have. It more than does enough at this present time. Although what Ms McElwee is looking for might advance the position of trade unions, I am not sure it is going to advance the competitiveness of Ireland Inc.

Ms McElwee said in her submission:

The Commission report confirms that the design of the framework is entirely up to member states. It further clarified that the action plan may be adopted by way of consulting with social partners, reaching an agreement with them or between the social partners following their joint request.

Ms McElwee might elaborate on that. In the second part, she said that the Minister "might consider strengthening" the provision of the 2000 Act with respect to updating the national minimum wage to remove the Low Pay Commission's discretion in this regard, "and to ensure that the LPC must consult with, have regard to and respond to the views of the social partners when making a report to the Minister".

Could Ms McElwee respond to that?