Séamus Kirk (Louth, Fianna Fail) | Oireachtas source

I thank Deputy Calleary for providing me with the opportunity to make a contribution on this important issue that has been swirling around in the political arena for some time. To paraphrase, the Minister, Deputy Burton, said two months ago that middle Ireland cannot take any more. As some of the previous speakers have indicated, there are approximately 200,000 small businesses employing over 650,000 people in the economy. In 2010, employers paid €5 billion or 75% of the total contribution to the Social Insurance Fund. Cost competitiveness is a vital ingredient for every company's success. Imposing an additional €89 million in taxation on struggling businesses with a new sick pay scheme will devastate small and medium size employers and they will be driven out of business.

The Government's record on tackling rising costs for businesses is not good. The reality is that if we are going to create employment in this country, the issue of cost competitiveness is vital. Some progress has been made but more needs to be made to ensure that, when the hoped-for lift in the eurozone and the world economy materialises, we will be in a position to avail of it.

In sectors such as retail and hospitality, employee costs account for 60% of overall costs. Job losses will be an inevitable outcome if this proposal is implemented in the budget. It is calculated that the average number of days lost per annum in the public sector in recent years was 12, four times the three days lost in SMEs. That statistic speaks for itself and indicates clearly where action needs to be urgently taken.

Under this proposal, businesses will take a three-way hit. They will be paying PRSI, paying sick pay and paying wages to cover the cost of replacement employees. Unfortunately, the proposal smacks of ideological prejudice of the worst kind. More SMEs will fold, with consequent unemployment for many people. Indeed, in a recent press release, IBEC calculated that the job losses could be in the region of 3,500. Frankly, that number of job losses in the economy at this time, with so many people unemployed, removes the justification for the imposition of a new statutory sick pay arrangement.

I am pleased the Minister for Finance is present in the Chamber for this evening's debate because, ultimately, he will be the one to take the decision on the matter. The introduction of a sick pay scheme would be the wrong thing for the economy at any time. We must get cost-competitiveness right for the business sector to allow it to fulfil its role of job creation, in addition to running its businesses, for the many people who are available to take up such work.

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