Joan Burton (Dublin West, Labour)

In terms of the employer job PRSI incentive scheme, which has been available for some time, as of 10 June 2011 applications were received from 480 employers in respect of 708 employees, 313 employers were awarded exemptions in respect of 429 employers and 157 employers had claims rejected in respect of 215 employees. The numbers involved in the existing scheme are relatively low. Deputy Ó Snodaigh suggested earlier that the 50% reduction offered in this scheme makes it more attractive but we can only speculate about this because there is no evidence to suggest that responsible employers will reduce wages as a consequence of this arrangement.

Alongside the fact that the minimum wage is increasing by €1, this is an attempt as part of other elements of the jobs incentive package, such as the reduction in VAT, to provide a stimulus for employment retention and creation. If each of the thousands of small firms in the country took on an extra employee, that would produce a significant outcome for employment. However, in the current economic situation maintaining staff is challenging in itself for small and medium sized enterprises. This measure is targeted at specific sectors where the beneficial effects of job retention and creation will be spread throughout the country.

The Government has put forward the initiative as part of the programme for Government. We wish to encourage employers, through the initiative, to both retain and hopefully increase employment. I recognise that this is not a panacea for all the cost issues faced by employers. The jobs initiative is about targeted interventions. The measure is targeted, in particular when one considers that there is a countervailing measure in terms of employees' pay, which is the restoration of the minimum wage, being introduced at the same time.

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