Leo Varadkar (Dublin West, Fine Gael)

I support this amendment. In many ways, this issue speaks to the values of our society and the values by which we want our economy to operate. One of the basic values of our society must be that work pays. If we want a capitalist economy and society, we must also have social justice and a system in which work pays. If this measure is introduced, work will no longer pay for many of the people now at work in low paid jobs.

Many untruths have been uttered about the minimum wage in the course of this debate. The minimum wage applies to a very small number of people, perhaps 4% of the workforce. These are generally people who work very hard for very little money, domestic workers, cleaners and people such as those who work in petrol stations. There is a misconception that we have the second highest minimum wage in Europe. That is not true. Nominally we are third, but in many countries where there is no national minimum wage, like Germany and the Nordic countries which have sectoral minimum wages, those minimum wages by and large are far higher. It is also worth noting that in all those countries where there is a higher minimum wage, unemployment is lower. Therefore, the suggestion that there is some sort of direct correlation between the minimum wage and levels of employment does not pass muster.

We must also compare the justice of this measure. A previous speaker pointed out that there has been no nominal cut in Deputies' pay in this budget, which is true, but between the PRSI and other measures, there is a 9% cut. However, that cut is less than the 12% cut proposed in the minimum wage today. The overall cut has been 25% but that was spread over three years, whereas this measure makes a cut of 12% in one fell swoop. It is unjust.

Previous contributors, including Deputy Noonan, have noted the budget's other unjust measures. Many self-employed people earning high salaries will gain from this budget. I accept this is the result of correcting an anomaly whereby self-employed people paid 56% tax compared to the 52% or 53% paid by employees. I understand why it was considered unfair to tax self-employed people more than those in employment but, in terms of politically proofing the budget, the Government could have waited for another day before correcting the anomaly. High earning self-employed people would have tolerated their income tax rates being frozen rather than cut in a budget that also reduces the minimum wage.

It is remarkable that the Government is using financial emergency legislation to cut the pay of private sector workers but it will not use similar means to cut the pay of bank or semi-State company employees who received pay increases over the past two years. How can the Government justify increases of 3% and more to workers in semi-State companies and the banks when it uses emergency legislation to cut the minimum wage?

No other country has ever reduced the minimum wage. The leaders who people like to suggest are bêtes noires, such as Reagan and Thatcher, did not cut the minimum wage. This will be the first Government in the history of the world to reduce the minimum wage, with the possible exception of Pinochet's Chile. Other than a small number of business organisations, nobody asked the Government to make this cut. In effect it is taking the easy decision while leaving the next Government to address the more complicated and important task of reforming the registered employment agreement rates, which are much higher and include numerous restrictive conditions.

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