Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I compliment Deputy Calleary on moving this important motion and welcome the opportunity to make a contribution to this debate. If we take as our starting point that the Government's top priority must be job creation and retention must, this should guide the rest of the debate on this motion and the proposal the Minister appears to be intent on pursuing. We must also accept that economic recovery and job creation will be led by the private sector. While the public sector can enable and facilitate job creation, the private sector will continue to be the driver of job creation.

We should not do anything that damages the creation of jobs. The first point anyone in business will make when discussing the role of government in the economy and job creation efforts is that Government should avoid doing any damage. That is the context in which this debate is taking place. It is indisputable that the Minister's proposal to require businesses to pay the first four weeks of illness benefits to their employees will cost jobs and its impact will be most acutely felt by small and medium sized businesses. Faced with such a scenario, many companies would have no option other than to pay another employee to do additional hours or bring someone else into the company to cover for the person on sick leave. This is a burden many employers would be unable to sustain in the current economic environment. Thousands of businesses are hanging on by their finger tips and a single policy decision such as the Minister's proposal would be sufficient to push them over the edge. The proposal would also affect large companies and make Ireland less attractive as a location for foreign direct investment. It would be unjustifiable to impose such a burden on the owners of small businesses who must watch every euro their companies spend.

I ask the Minister of State to clarify a matter. At a recent briefing, the representatives of the various business bodies informed us that the Minister had indicated to them that her proposed statutory sick pay scheme would only affect businesses with more than 100 employees. However, the relevant officials subsequently informed the same bodies that this was not the case. I ask the Minister of State to clarify whether the proposal on the table is comprehensive and includes an assessment of the impact of the measure on small, medium and larger businesses. It would be helpful to know what the Minister is thinking in this regard.

Deputy Calleary provided a comprehensive statement on the context in which this proposal must be considered. The number of people at work has fallen by more than 30,000 in the past 18 months, while the Central Statistics Office quarterly national household survey shows that the number of people out of work has increased. If one adds to the level of net emigration the number of people who have moved onto activation schemes, the real picture is much worse than indicated by the official measure.

It is necessary to tackle the cost base faced by businesses. Some progress has been made and the country's competitiveness has improved by 14% or 15% in recent years. While this is a welcome development, more needs to be done to address the costs incurred by businesses, for example, in the area of energy. The semi-State sector is still sheltered and exposed to limited competition.

When the cost base that semi-State companies have to live with increases the first thing they will do is pass that on to households and businesses. Time and again we have seen the cost of utility bills increase significantly which had a huge impact on businesses already struggling.

Deputy Calleary referred to the employer PRSI rate of 10.75%, which is high. That is a cost on employment and it would be insane to do anything at this juncture in our economic development that would increase the cost on employment. It will be counterproductive, cost jobs and a decision we will come to regret.

The issue of absenteeism and the difference between absenteeism in the public sector and the private sector is something to which we will have to face up. Everybody gets sick at some point in time but why is the level of absenteeism in the public sector so much higher than it is in the private sector? The reality is that the public sector has a much more generous arrangement in place for people who become sick. We know that employees in a small businesses in particular are acutely conscious of the impact on the business and on their employer if they are out of work sick for a period. They know the business will suffer significantly if they are out work and that it will push additional costs onto the employer. They know also that if they want to protect their jobs, going out of work sick is not a choice they want to make and they will avoid it at all costs. We will have to get to grips with that problem. Why is the level of sick leave in the health service and in the Civil Service so high? It is because it is seen as an entitlement and almost as an extension of annual leave. They believe they are entitled to so many days a year and they will take those days. The Minister will have to grasp that nettle and bring in the unions if necessary to address the issue because it is not sustainable.

It is clear that a battle is going on within Government. Although he cannot admit it the Minister of State's personal views would concur to a large extent with what he is hearing from Fianna Fáil Deputies tonight. I am aware his colleague, the Minister, Deputy Richard Bruton, has put his views on the record. The Minister, Deputy Joan Burton, has to make savings in her Department. There is no easy way of doing that but it would be shortsighted if she were to choose this particular option because the deficit in the Social Insurance Fund, which is referred to in the Government's amendment and dealt with by KPMG in its actuarial review, will get worse if she makes this change as it will result in many businesses closing and their contributions to the fund will be affected as a result.

I raise the issue of sick notes from general practitioners which must be faced up to. How many GPs throughout the country are refusing to give sick notes to employees when they ask for them? That is something the Government will have to examine in terms of the control measures that are in place to ensure that people who are claiming illness benefit for a short period are genuinely sick, and that that has been correctly verified.

I have dealt with the issue of small businesses which have to bring in additional help and pay for substitute work. That is key. When one talks to Enterprise Ireland, and IDA Ireland in particular, it is clear that when it comes to inward investment the client companies they are trying to attract into Ireland look at the overall package. They look at the skills available in the labour force, the quality of the education system and the infrastructure but they are also looking at the cost of employing people. There is no doubt that if this change is made it will make Ireland less attractive. We can argue by how much but it will certainly make Ireland less attractive, and that will become a factor for such companies making decisions in that regard.

I am glad the Minister, Deputy Burton, has joined us. The Minister has a difficult job in the coming weeks to come up with an adjustment of €3.5 billion. It will not be easy to find that but in making those decisions she must ensure she does not damage any prospect of an economic recovery here because as the Labour Party rightly pointed out time and again from the Opposition benches, the cost of having somebody unemployed is approximately €20,000 a year when taxation revenue lost and the cost of paying social welfare is taken into account. That is the way we will bring about a recovery. We must do everything to support the people who are creating and maintaining jobs and when they speak with one voice and are tell us unanimously that this proposal will cost jobs, we must sit up and take notice and not proceed with it.

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