Mr. Neil McDonnell:

I wish to express our gratitude for the opportunity to address the committee. As our economy progressively reopens post-pandemic, small and medium enterprises, SMEs, are faced with acute financial, labour, operational, health and safety, and political engagement issues. Despite the presence of so many large multinationals in Ireland, almost 68% of Irish workers are employed by SMEs. Almost half that number work in a business with fewer than 50 employees. SMEs are the bedrock of the Irish economy, and the survival of the greatest possible number of them must be a priority for the House.

Almost one third of the businesses in The Irish Timestop 1,000 companies list that was published last Friday meet the EUROSTAT definition for an SME. That is one third of the top 1,000 companies. By the time one finds the last company in The Irish Timeslist, one will find a business turning over €16 million per annum, with 45 employees. Ireland is an economy and a society of small businesses. We have seen remarkably few insolvencies to date, but this number is set to rise quickly. It is imperative that members do all they can to enact the small company administrative rescue process, SCARP, before that happens.

While grant supports have been enthusiastically used by SMEs during the pandemic, debt supports have not. The employment wage subsidy scheme, EWSS, remains absolutely essential in those parts of the economy that have yet to fully reopen. Irish people do not benefit from being citizens of the second most expensive economy in the EU. Therefore, the 9% VAT rate should be maintained indefinitely, and the higher rate should permanently revert to its historical rate of 21%. Redundancy costs are likely to be a significant burden for many employers in the medium term. The statutory redundancy rebate for employers should not have been removed nine years ago. It should be reinstated in full now, or the 0.5% levy on employers’ PRSI, which financed the rebate since 1979, should be removed from PRSI.

The PUP is, unfortunately, acting as a significant brake on return to work in many areas of the economy such as agriculture, hospitality, grooming and accommodation, and should be tapered more rapidly than the current plan suggests.

While we do not oppose improvements in employees' entitlements in principle, we believe the financial implications of many of them are not understood by legislators. The social fund must be used as the backstop for increased levels of employee support, as it is on the Continent. This will require higher levels of employee contribution. Significant disincentives persist against employees returning to the workforce in the €18,000 to €30,000 per annum income bands. We ask legislators to look at the four key proposals in our Jobs Kill Zone report in this regard. That has been circulated to all Members of the Houses.

There is a disgraceful lack of clarity on the rights of employers and employees to know the vaccination status of co-workers returning to the workplace. This places employers in the invidious position of being "damned if they do and damned if they don't". This is unacceptable and must be addressed before a minority of cynical members of the legal profession attempt to exploit it. GDPR is not an impediment to ascertaining the vaccination status of a returning employee.

There is a continued failure on the part of the Government to engage with SME employers. The only standing liaison body between the Government, employers and employee representatives is the Labour Employer Economic Forum, LEEF, and it excludes SME representatives. This is unsustainable. The failure to engage with small enterprise employers is having a serious impact on the development and update of the Work Safely Protocol since its focus is on large enterprises and excludes consideration of 99% of Ireland's employers.

The detail behind this summary follows in the submission. I am happy to take questions now.