Mr. Tim Duggan:

There are different ways of looking at this. We have always acknowledged that at the outset - I said the same in response to Senator O'Reilly - there is an additional cost on employment when you introduce something like this. The initial cost is quite low, at 1.5%, and has been deliberately designed that way. The increase up to the actual rate of 6% is being graduated over a ten-year period, very deliberately, to ensure it can be factored in to remuneration discussions in order that it becomes part of normal wage increases and in that way, does not become a significant additional cost on businesses of any size. That came about as a result of the consultation the Department had with employer representatives of all types, from the big groups like IBEC down to the very small representative groups for hospitality, convenience stores and that micro-enterprise level. That consultation has resulted in that ten-year phasing-in period to deal with the very issue the Deputy raises.

The ESRI has done an impact assessment of auto-enrolment and has highlighted how it will result in some additional cost but over time, they will dissipate in the way I have said. In addition to that, it will result in people in the future having significantly greater spending capability, which in itself is critically important for small and micro-enterprises so that people in localities actually have money to spend in those localities. Auto-enrolment will be critical to facilitate that in the years to come. Otherwise, as we discussed earlier, lots of people will be critically dependent on the State pension on its own. While that is great at keeping people from poverty and providing them with necessities, it is not great for facilitating the discretionary spend on which a lot of micro-enterprises are critically dependent.