Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank my colleague, Deputy Dara Calleary, for tabling this motion on one of most important areas in Irish society, self-employed people and small and medium-sized enterprises, SMEs. We recognise there are approximately 350,000 self-employed people in Ireland, a figure that is generally ignored. Protestations about how badly they are being treated by the Government have been falling on deaf ears. There are approximately 600,000 people working in SMEs, namely, enterprises with up to 50 employees. Many local shops and supermarkets have higher numbers but we refer to them as relatively small businesses. We must put this into context. Up to 200,000 people are working in foreign direct investment companies but the contribution of SMEs and the self-employed is far greater.

The motion highlights the disparity in tax treatment between the self-employed and the PAYE sector. We have come through a difficult time and social welfare benefits, including jobseeker's benefit and illness benefit, are not available to self-employed people if a business goes bust. More often than not, these people employed a number of people who are able to receive benefits, whereas the self-employed person is not able to avail of them. The motion calls for the introduction of an earned income tax credit for self-employed people on a phased basis. If returned to government, we will do it over a two-year period. This will be equal to the value of the PAYE tax credit of €650. The anomaly has been there for a number of years and needs to be addressed. We have also called for the provision, on a voluntary rather than on a compulsory basis, of a range of social protection payments, including jobseeker's benefit and illness benefit for self-employed PRSI contributors, as part of a commitment to fostering an entrepreneurial culture as well as enhancing social solidarity. It is very important that we set out to achieve that.

It is also important to recognise that when businesses at local level are involved in local activities, they source the majority of their materials and services locally and this has a tremendous multiplier effect in terms of money circulating throughout the local economy. This is much more the case than with foreign direct investment enterprises, welcome as they are. There are more people working in small local industries, including in retail and other sectors. The key problem facing self-employed people who are now unemployed is that they are entitled to only a limited range of social welfare payments. To be eligible for jobseeker's assistance, a self-employed person must undergo a phenomenal means test. If the person had any assets built up in the business or tried to provide for the future by acquiring a property, such as a second house or a rented house, he or she will not be eligible for social welfare payments or social assistance payments because he or she will not have built up eligibility since he or she was not allowed to contribute. The motion refers to the voluntary introduction of such a code. If people apply for such payments, there is a tremendous waiting list. People in the self-employed category include farmers, professional people, certain company directors, people who run their own businesses and sub-contractors. I will address the latter before I conclude.

When we recover economically, and not just within the M50 but in the rest of Ireland, the SME sector will have a significant part to play in the recovery. It is important to have a safety net and to be able to claim some social welfare payment on the basis of having contributed to it. People are not asking for something for nothing. They want to pay and want legislation to allow them to contribute. In the interest of social justice, it is important that the facilities are provided.

In the USA, self-employed and employed people pay social security tax, which is something we should consider. The motion refers to extending, on a phased and voluntary basis, the full range of social welfare payments, including jobseeker's benefit and illness benefit to self-employed people. Self-employed people should be able to opt into the existing class A PRSI structure, paying the rate corresponding to their income level. This will contribute to making class S payments. This additional voluntary payment will equate to approximately 4% for self-employed people with income over €356 a week. They are not looking for something for nothing and they want to make a contribution and to get the benefit of the contribution if the rainy day comes along. If the rainy day does not come along, everyone is a winner, including the economy because we will not have to pay out and small businesses will probably be going from strength to strength. As part of the programme of extending the benefits, we propose a limited recognition be given to class S payments made to date by self-employed people, which gives them very little benefit. This can be done by working out the balance of what they have paid and by working it into the payments they will make in the future.

I congratulate my colleague, Senator Darragh O'Brien, who introduced legislation in the Seanad on behalf of Fianna Fáil, entitled the Public Services and Procurement (Social Value) Bill 2015. I hope it will get full support from the Government and that it will be passed. This Bill requires all public bodies to have regard to economic, social and environmental well-being in connection with public service contracts and to provide for related matters. The Minister of State will be interested in the following area. We want a community benefit requirement in all of the major construction and other contracts given out by public bodies. This relates specifically to training and recruitment and the issue of apprenticeships. The Minister of State visited the ESB training centre in Portlaoise in my constituency and spoke about the importance of apprenticeships. The chief executive of the ESB is chairing a committee on this but we are light years away from where we should be in terms of the number of apprenticeships. It should be a requirement that this be taken into account when public sector contracts are being given out. The opportunity for sub-contractors to avail of this work should also be taken into account as well as the value to the local economy. It is not just a question of the lowest price, even though we want to drive down prices and get the best value for money for the taxpayer. Other factors arise that should be taken into account.

Senator Darragh O'Brien said that unlike many other EU countries, Ireland focuses solely on the lowest price in many situations. Most other EU countries have a mechanism in place, so it is not anti-EU. Every time we want to do something, we think the EU will not allow it. The EU allows many things but we have decided not to do them. Most EU countries have introduced social clauses to allow the state to choose offers.

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