Ray Butler (Meath West, Fine Gael)
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I am very disappointed that there are no members present from the main Opposition parties, Fianna Fáil and Sinn Féin. This is a major issue given that there are 300,000 to 400,000 self-employed in the country and they have been neglected for far too long by previous governments. The Minister, Deputy Burton, has done a considerable amount for the self-employed, including lowering the threshold so that they can get social protection.

I recall canvassing a house where a gentleman had been self-employed and his business, which was based at the side of his house, had ceased trading. I went into his office and saw all the files for the income tax, VAT and PRSI he had paid into the system. When he needed help from the system, there was no help there for him. Thankfully the Minister has now changed the requirements to allow such a person get a letter from the accountant stating the business has ceased trading in order to be assessed for social welfare. We have advanced in leaps and bounds. When I was elected to the House two years ago I recall asking about social protection for the self-employed. A civil servant told me it would be impossible because it would require a stamp of 30%. We have come a long way from 30%; we are down at 15% and 5.5% for sickness and disability benefits.

I welcome that 80% of the formerly self-employed people, who applied, qualified for social protection. This is proof of the Government's commitment to supporting our business community through good times and bad times.

The first step is implementing a new class stamp of 5.5% for the self-employed. I discussed this with the Minister during a Topical Issue debate this week. We do not need to apply the full 1.5% straightaway because we understand the existing climate. We can introduce it in stages by starting at 0.25% and building it up over the years, as the economy gets better. I ask Ms Kennedy and Ms Mooney to give me their opinion on that. We need to remember that we are looking after self-employed people at the moment so the PAYE worker is footing the bill. We need to put in place a system that is fair to everybody, including the PAYE worker who is helping the self-employed person now. That self-employed person is not paying on his stamp for the entitlements he is getting so we need to be fair to everybody.

We are the last country in industrialised Europe not to have social protection for the self-employed. I have studied various countries. In the United Kingdom calculation of social protection for self-employed is through their profits. For the first €7,000 profit in a business, the person can get an exemption form and not pay anything. For profits between €7,000 and €11,000, they pay €3.30. For profits from €11,000 to 45,000, they pay 9% on a stamp which entitles them to most payments. However, they are means tested on long-term payments. I believe we should go with the 5.5% for the sickness and disability pay and then means test it with the UK model in mind for long-term payments.

Coming from a self-employed background I have always advised businesspeople that if they are making a profit in their business they are paying income tax. If they are not making a profit and are breaking even, they are paying tax on their drawings. Would they not be better clipping a little bit of this over to a stamp to give them security to pay their family bills etc.? ISME came rushing out like a greyhound out of the traps and claimed it was an extra tax on the self-employed. ISME should back off. I ask it and other groups if we should leave the system as it is when it does not work. I have visited the houses of self-employed people to find they are suicidal because they have no payments. I recently appeared on a LM-FM radio phone-in programme. One woman was working and her husband got sick. They had a mortgage and three children. Just because she was bringing home approximately €400, her husband, as a self-employed person, was entitled to €1.50 a week. I call on ISME to give this some thought and to be fair.

The IFA and other organisations have supported what we are saying but they want it to be voluntary. Unfortunately, a voluntary system will not work and it needs to be mandatory. I know this is being discussed at Cabinet and it will eventually happen. I want to see it happen sooner rather than later. I point out to all these organisations that we do not need to slap them with 1.5%; we can gradually introduce it. However, it will be the first time self-employed people in this country will ever have been recognised through social protection.