Deirdre Clune (Cork South Central, Fine Gael)

Considering there was not much time last week to discuss the reduction in the minimum wage rate, I am glad to have a further opportunity to focus on this measure. It makes no sense for the Government to reduce the minimum wage by €1 per hour as it does not save the Government any money for balancing the budget. Decisions in this area should always be taken to encourage people into work and off welfare, as they will always be better off in employment.

Fine Gael proposed in its budget submission that the minimum wage should not be cut but the 8.5% employer's PRSI contribution should be abolished, a more cost effective measure for employers. Such a measure would be more imaginative than taxing the 4% of workers on the minimum wage. Those budget cuts last week that focused on the lower paid will only take money out of the economy, leaving less discretionary income to be spent on activities such as going to the cinema or going out for a bite to eat. Instead of providing an economic stimulus, the Government has provided a disincentive for people to spend money.

Fine Gael also proposed the reduction of the VAT rate from 13.5% to 12% to encourage more consumer spending or for people to make home improvements such as house extensions. These kinds of imaginative and creative measures will get the economy going again and keep people in work. The Government, however, has done the opposite.

I was disappointed there was no focus on the joint labour committee's employment regulation orders. This is an area that needs urgent assessment rather than a nodding commitment to tackling it some time like that given to dealing with nursing home regulations. We have heard all the arguments against these orders but they actually make it expensive to employ people and run a business in sectors including agriculture, hotels, retail groceries, security, tailoring, shirt-making and contract cleaning. The JLCs and employment regulation orders are making it difficult to operate businesses and employ people, not the level of the minimum wage. The focus has been on the wrong area. It should have been on the JLC and employment regulation orders in an effort to get business costs down.

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