Mr. Neil McDonnell:

I will start on the national training fund and the PRSI levy. We are the first to say that our sector needs a lot of resources to be diverted into training because that is what all the economists are telling us about our sector. The SME sector in general, and this is not a criticism but an observation, is not a productive sector in comparison to foreign multinationals. The only way we are going to get there is through training and investment in people. However, and we pointed this out in our pre-budget submission, while we acknowledge that money needs to be spent on training, if one looks in the break-out in the budget about where the training moneys have gone, they have gone substantially towards the tertiary, the university sector and not towards on-the-job or employment training. That is not what people like those in ESRI are telling us. In fact, ESRI is telling us that there is a substantial degree of overtraining and overeducation in a lot of employment sectors.

A second concern about this is the cost one. Again, these are not out figures. The National Competitiveness Council says that up to 86% of the cost for a small business, especially in service businesses like Codex, can be manpower. Therefore, a small change in employers' PRSI in a business that has a large labour cost is disproportionately penal on that small business than it would be on Google or Intel. Lastly on the levy, and we would drew the committee's attention to it in our pre-budget submission, in 1979 employers were asked for an extra 0.5%in employers' PRSI to cover an insurance fund for redundancies. That levy has been in place ever since, and in 2012 we abolished the statutory redundancy rebate. That fund was in so much surplus from its inception in 1979 that the then Minister in 2002, Mary Coughlan, wrote a cheque from the Department of Social Protection to the Exchequer for €635 million. That is how much that insurance fund against redundancies was in credit at that point. Then, of course, we hit a massive wave of unemployment in the crash and then we took away that rebate from employers. The net effect of that is to make employers far more reluctant, even when the economy is in on the turn, to recruit people. Therefore, one needs to think of the unintended consequences of what one does when one takes away something the employer was paying for all along.

The message on the national training fund is, by all means take money out of PRSI for training, but by God we better see it in training. If we do not, then we want it back in PRSI.

I refer to the national minimum wage. The trade union sector has already queried why some employments are reducing their hours of labour as a result of the increase in the national minimum wage. We said all along that, if in those strained sectors or those sectors paying at or close to the national minimum wage, the payroll cost cannot be recovered from the customer, it will be recovered from the employee. It does not matter what the Houses of the Oireachtas say is the national hourly rate of pay. If the employer cannot pay that in what we would call P60, then the P60 will fall. We told the committee it would happen and it is obviously is happening in some areas now.