Joan Burton (Dublin West, Labour)

The reduction of employer's PRSI on those earning €356 or less a week was a commitment in the programme for Government. While it is important to create new jobs, it is also important to maintain existing jobs. This reduction in employer's PRSI, which will last until the end of 2013, applies to existing and new jobs. Everyone knows from the economic collapse the difficulties in getting new jobs and maintaining long-standing jobs and businesses. This measure will help achieve both.

The underperformance in the tourism sector over the past several years highlights the need to improve the sector's cost competitiveness. One set of costs important to this sector and other employment-rich sectors are labour costs. This measure will give an incentive to employers to take on new workers and maintain existing jobs. The halving of the lower rate of PRSI until the end of 2013 will improve labour and competitiveness, assist job creation and maintain existing employment in labour-intensive industries. The measure is in line with the commitment given in the programme for Government which was to halve the lower rate of PRSI.

Given the current unemployment situation, I am satisfied the lower rate should apply until the end of 2013. A lower rate of employer's PRSI for workers earning below €356 per week has been in operation for several years. There is no evidence to suggest the existence of this rate encouraged employers to reduce wages to come within the qualifying criteria to attract the lower rate. I understand and respect the Deputy's concern about this matter. He should, however, bear in mind that the Bill also provides for the restoration of the minimum wage to €8.65 per hour. This will be extremely important for employees who are on the minimum wage and who work a 40-hour week. The change will be worth €40 per week to these individuals. It is, therefore, quite an important measure.

This is one of the issues which the Government has sought to address in a way that differs from that pursued by the previous Administration in the context of the agreements into which it entered with the IMF, the EU and the ECB. I hope the Deputy will accept that the Bill is balanced, that it restores the minimum wage and that it provides an important incentive to employers in respect of not just taking on new staff, but also with regard to retaining existing employees.

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