Joan Burton (Dublin West, Labour)

The jobs incentive is a stimulus package which offers incentives to employers to both retain staff and take on extra staff. I cannot offer evidence to Deputy Higgins in advance of the measures coming into effect. What will happen after the 1 July is that the minimum wage will be reinstated and employers will have a reduction of 50% in the rate of PRSI for people earning €356 per week or less. In addition, there will be reductions in the rate of VAT, particularly geared towards tourism and personal services sectors such as hairdressing.

Economic evidence nationally and internationally indicates that when one has a reduction in costs, particularly in industries where high costs have perhaps deterred customers from using the services of those industries such as British tourists returning to this country in the kind of numbers in which they used to visit, one can expect a stimulus effect in two areas, the first being an increase in the retention of the number of employees, as many unemployment difficulties relate to losing long-standing jobs in areas such as the bar trade where many different things are happening and the tourism sector, hotels and personal services such as hairdressing. The second is that the lower rate of VAT is being introduced in those particular areas of activity.

I cannot offer the Deputy evidence in advance of the measures taking effect but in the context of the amendment tabled by Deputy Ó Snodaigh, which he now intends to withdraw, we will make evidence available through the medium of parliamentary questions and similar mechanisms as the schemes go into operation.

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