Mr. Fergal O'Brien:

We are within strong safety boundaries with that assessment. The State would get back the revenue on the buoyancy side.

Our surveys show that 70% of our members are paying some or all of the health insurance costs of their employees. It has become a significant labour cost item and has registered with the multinational sector. It is a concern.

There is some unmet demand in access and availability of credit. Our real concern is where the investment finance will come from when we return to growth. Have we a sufficiently robust and healthy banking system that can provide that investment finance? As we have told the committee in the past, Ireland was excessively reliant on banking finance in the past. This will have to change and we are going to need a much more diverse funding model. We would see schemes from Enterprise Ireland, such as the employment investment incentive scheme, and other funding mechanisms such as the National Pensions Reserve Fund playing a role in diversifying availability of credit. The employment investment incentive scheme is not really delivering and it can be adjusted to make it work.

I agree with Deputy Tóibín on consumer expectations. People feel more taxes will be introduced and we are still waiting for consumer confidence to come back. The savings ratio is still incredibly high and there is no sign of it coming down. If there were a greater certainty for households, spending would come back because the capacity to spend is evident in the savings ratio.

We have detailed analysis of the jobs benefit of the measures introduced to help the hospitality sector. We are making a submission on this to the Government tomorrow which we will also send to the committee. Our analysis shows these measures really worked, brought in jobs, revenue for the Government and are worth keeping. Given the wider fragility in the domestic economy, it is far too early to remove these emergency measures.

Electricity costs to business have come to the top of the agenda again. In particular, large energy users tend to be in internationally competitive sectors. For some businesses it can be a really large cost item.

Very often, it can be non-pay labour costs, for example pensions. We see many employers who are still trying to work through issues such as defined-benefit pension schemes, which carry incredible costs. Health insurance costs are also an issue. While we do not have useful international comparators, we know that in countries where business pays somewhat higher social insurance costs, that buys a great deal for employees in pension and health benefits. Employers do not have to pick up that tab. In Ireland, much of the cost is on a certain cohort of employers - the larger ones which are competing internationally. They are more likely to have pension schemes and health insurance. They carry a great deal of additional cost in terms of their fully loaded labour costs. In Germany, social insurance contributions pay for pensions and the bulk of health care. In Ireland, they do not and much of the cost is left with the employer.

We have done a great deal of detailed work on the research and development tax credit, feeding into the Department of Finance review. I will send the details of the work to the committee. I fully agree on the significant challenge on take-up among SMEs. We have suggested to the Department of Finance that there would be considerable merit in having what may be termed a "research and development light" scheme for SMEs. It is complex, involving a great deal of heavy tax analysis and issues of defining research and development activity. It would be useful to have a simpler, pro-formascheme for SMEs, published by Revenue and promoted by Enterprise Ireland. Many SMEs are carrying out research and development but do not realise it. They are not getting support and a dedicated scheme could make a real difference. I am happy to send our specific suggestions in that regard to the committee and to engage on them afterwards.