Mr. Mark Fielding:

May I pass on my condolences to the late Deputy McFadden's family, friends and the members, her parliamentary colleagues? Our sympathies go to her children, Caren and Eoin. Ar dheis Dé go raibh a anam.

The Irish Small and Medium Businesses Association, ISME, represents just over 9,000 member companies employing approximately 225,000 employees, and we welcome this opportunity to make this submission. The sector we represent accounts for 99.8% of all enterprises, two thirds of all employment, and over 50% of all added value created in Ireland. Those enterprises play a decisive role in Ireland's economy and in the society. We are drivers of innovation and we also ensure social and regional stability but we rely on the Members of the Oireachtas to understand not only the role but also the needs of the SME sector and ISME, the only independent representative SME organisation, will work with the members of this committee to achieve a comprehensive, sustainable and socially reliable private business sector.

If I came in here today and told the members that 324,000 of our citizens were being discriminated against because they are from the Traveller community, were black, gay, disabled or even Protestant, they would be able to immediately sort it out for me. They would right the wrong and give me a solution, but there are 324,000 self-employed people within the SME community who are being treated differently from others because of who and what they are. They work the same as everyone else; some would say they work harder. They pay the same taxes, actually we pay higher taxes. They pay the same rates and the same property tax yet they are treated differently. They are even regarded in many areas throughout the country as local heroes because they employ thousands of people who were responsible for the economy of many small towns and villages. However, when things go wrong for them their treatment is deplorable in comparison to others, in particular their own employees. It is our experience that the vast majority of the self-employed who subsequently become unemployed have already invested their savings in an attempt to keep their businesses afloat and are therefore very much on the bread line when their business closes. They have no additional income and in many instances they are highly indebted.

We have heard the Minister for Social Protection on this issue. She constantly and consistently outlines that despite constraints, the Government is determined to do its utmost to protect the most vulnerable in society and among the most vulnerable in society currently are the self-employed people who have lost their businesses. That is borne out by many spokespersons from the Society of St. Vincent de Paul, the Salvation Army and other similar organisations.

The system in Ireland is completely unfair as it is based on antiquated, bureaucratic and cumbersome legislation. There is something badly wrong when a system that provides automatic welfare entitlements to employees in the event of a company closing down will not give a cent to the company owner, leaving thousands of individuals and their families on the bread line. The system is driving some of our entrepreneurs to emigrate. That is in total contrast to the United States where business failure is regarded as a badge of courage and entrepreneurs, with the scars of business, are seen as local heroes.

The facts are that an employee who loses his or her job has an immediate entitlement to benefits. A self-employed person has none. There is no means test for the unemployed employee but the self-employed person is fully means tested. The personal savings of the employee are not assessed. All the savings of the self-employed are assessed. Any other income in the employee's case is not assessed but all income is fully assessed for the self-employed. The co-habitee income is not assessed on the employee but it is assessed on the self-employed person. The value of all property is ignored for the employee but the value of all the property other than the family home is taken into account for the self-employed. Invalidity is covered for the employees but it is not covered for the self-employed, and disability is covered for the employee but not for the self-employed.

Right down the line, when it comes to the social welfare system, a self-employed person who loses their business and loses their job is at the end of the queue. We are happy that the self-employed people generate employment and wealth, and pay higher taxes, but in the event of those people becoming ill, incapacitated or unemployed, they find themselves without the support given to their employees. That is economically unsound. It is a disincentive to entrepreneurship as well as morally repugnant.

It is bad enough that the self-employed are crippled by the loss of their business in many cases, and they have lost their life savings, without being further penalised and humiliated by the State. We urgently require reform of the social welfare system. ISME is recommending that the self-employed and proprietary company directors be allowed choose a higher PRSI contribution, as has been mentioned already. It will be an opt in or opt out, therefore, if they choose to pay a higher rate of PRSI they will be covered. If they do not, they will remain as is, so to speak.

The current method of assessing the self-employed for jobseeker's allowance should be simplified with regard to income, spousal income, and assets and savings. We also believe there is a need for a national awareness information campaign aimed at the self-employed in regard to their entitlements and their benefits. Information also on the classification of different types of employment - the difference between contracts of and contracts for service - must be included.

While ISME acknowledges that it is not the role of the social insurance system to promote and encourage entrepreneurship, we would also say it is not its job to hinder it. The current system is acting as a disincentive and an inhibitor of entrepreneurship, which significantly and unnecessarily penalises the self-employed.

As I stated at the outset, we rely on the Members of the Oireachtas to understand not only the role but also the needs of the SME sector and I ask them to consider the needs of the 324,000 citizens who are currently discriminated against as self-employed.