Joe Costello (Dublin Central, Labour)

I am pleased to have this opportunity to speak on the Bill. There are important provisions in it, not least the reversal of the cut in the national minimum wage, which all sectors of the House have welcomed, although it is not that long ago since IBEC and the outgoing Government said it was essential to reduce the minimum wage to increase our competitiveness and foster job creation.

I have not heard a single word of evidence that one job was created by the reduction in the minimum wage. I would love to hear the evidence to that effect but I do not believe that measure made us one whit more competitive. It is that type of message that comes across from vested interests that is not challenged and that can result in an entire community whose members are dependent on the minimum wage finding themselves in extreme poverty. By reversing the cut in the minimum wage, the consequent increase in income of up to €40 per week can make a difference between people not being able to make ends meet and being able to do so.

It is extremely important that we have put down this marker in our society that we will not have a race to the bottom - that we will not condemn our least well paid to poverty. That is very important in these recessionary times.

Every cent that is spent in terms of the increase in the minimum wage will be spent in the community in the local shops because it is there that people on low income spend their money. They do not have surplus disposable money to spend on a luxury holiday or a car. They spend their money in the community on bread and butter issues.

This Bill is generous to employers in providing for a halving of the lower rate of the employer's PRSI contribution from 8.5% to 4.25% where reckonable earnings in a week do not exceed €356. That is a significant concession to employers in the catering and tourism sectors. It will cost costs and should help to incentivise them in terms of their workforce. That combined with the reduction in VAT rate from 13.5% to 9% means that employers should have no reason to complain and should recognise that the Government is taking their interests carefully into consideration.

The activation initiatives in terms of the national employment and entitlements service that will be implemented under this legislation are extremely welcome. I particularly welcome the national internship scheme which provides for 5,000 work experience placements for jobseekers. The terms of reference extend to private, public, community and voluntary sectors with a top-up of €50 per week. That is extremely broad. Employers in every sector will be able to avail of this scheme. As Oireachtas Members, we should show good example and lead from the front by taking on interns and giving them work experience for up to nine months. It would be desirable for us to avail of that initiative.

Perhaps the most controversial area is the question of the increase in the State pension age. The EU-IMF bailout deal negotiated by the previous Government requires substantial adjustments to the State pension age by the end of June 2011 so there is not much time to deal with these adjustments. State pensions will be standardised at age 66 in 2014, increased to age 67 in 2021 and to age 68 in 2028. We recognise the reasons this has been done. It is due to the rapid growth in our ageing population and because there will be a decreasing workforce comparatively, with the ratio of six workers for every one pensioner at present compared with two workers for every person over the age of 65 in 2050.

Ironically, a former Minister for Finance, Charlie McCreevey, had the right idea. He wisely put aside 1% of GNP in 2000 or thereabouts into the National Pensions Reserve Fund to prepare for the rainy day but through the mismanagement of the previous Government virtually all of that money has been transferred to recapitalisation of the banks and the EU-IMF bailout.

Raising the retirement age is a little like a curate's egg, it is not all bad - there are good aspects to it. We have a healthier population now and many people would like to work to a greater degree if they had the choice but there are considerations to note. I believe anomalies will be created in terms of people's income and entitlements. The Senior Citizens Parliament has expressed concern at the discontinuance of the transitional State pension prior to age 66. It has also expressed concern that many State agencies such as the VHI, the Drivers Licensing Authority, the Passport Office and CIE, as well as many companies in the private sector such as Aer Lingus, have different rates, benefits and concessions which become applicable at the age of 65. Equality legislation may be required to address some of these issues to ensure that we do have various anomalies created by the legislation which would disadvantage the elderly.

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