Michael McNamara (Clare, Labour) | Oireachtas source

I thank Deputy Calleary and Fianna Fáil for raising this issue and allowing us to look at it in some detail. In Deputy Calleary's speech last night he said that while some OECD countries have statutory sick pay schemes to which employers contribute, some do not. What the Deputy did not say is that the great majority of OECD countries have statutory sick pay schemes to which employers contribute. My colleagues have outlined in considerable detail the countries which have such schemes and Ireland is in a small minority of countries which do not have a fund to which employers contribute. However, Deputy Calleary did find a few countries where employers do not contribute and these include Canada, Greece, Portugal, Turkey and the United States of America. If one takes a cursory look at OECD data to determine what the income tax plus employee and employer contributions, less cash benefits were in 2011, as a percentage of labour costs, one sees that Ireland is ranked quite low, at fourth from the bottom. In figures, Ireland comes in at 21. 3% while Canada, which was cited by Deputy Calleary, came in at 26.1%. There was no data available for Greece. Portugal came in at 33%, Turkey at 35% and even the United States, also cited by Deputy Calleary, came in at 27.2%.

So, accepting the veracity of what Deputy Calleary said, that employers do not contribute to the fund in those countries, then if Ireland is lower than all of these countries in terms of income tax plus employee and employer contributions, that would indicate that the only way to counter that is to increase the employee contribution or to increase income tax. That is, of course, a way of paying for statutory sick pay but if that is what Deputy Calleary is suggesting, then he should be honest about it. Be the party of taxation. Be that welfare party that Fianna Fáil has had a slightly schizophrenic relationship with since its foundation. Be the party of tax and spend. The Bertie Ahern years were about spending and he was a socialist in some circles but, of course, he was a fiscal conservative in others.

The reality is that everything costs money, from statutory sick pay to the current scheme, which, as Deputy Burton pointed out, is unaffordable as it stands. The fund currently has a significant shortfall of income over expenditure. The estimated expenditure is €9 billion, set against income of €7.5 billion this year. In the absence of action to tackle that shortfall, the 2011 deficit of €1.5 billion will double to €3 billion by 2019. In other words, the shortfall will increase from 1.1% of GNP to 2%. This scheme is one proposal to fix that shortfall and there are others, including increasing taxation. However, this Government has said that it will not increase taxation and in particular, it will not increase the taxation of the low paid. If that is Deputy Calleary's solution then I invite him to be honest and outline that to the House in his summation of this motion. I thank the Deputy for the opportunity to look at this matter in considerable detail.

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