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

Some of the numbers put on the record by the Minister concerning the growth in the scheme are quite extraordinary. I have consistently made the point, on behalf of my party, that the kernel of the issue is whether there is a demonstrable link to employment creation and retention. It is only in that circumstance that such a scheme can be justified to the hundreds of thousands of workers who pay comparatively high rates of tax. In considering the impact of the changes made in 2015, it is clear that the cost more or less doubled in the first year, from €9.5 million in 2015 to €18.1 million in 2016.

Tables one and two in annex three, provided by Revenue, help to illustrate my point about a demonstrable link between employment creation and retention and this scheme. Table one shows the increase in the number of employees as reported by employers as a result of SARP. It shows an increase of 477 in 2016. The number of employees retained as a result of SARP, as reported by employers, was 607 that year. A total of 1,100 employees were either recruited or retained specifically because of SARP, according to the employers. I presume this will be captured by the review, but to what extent are those figures probed and to what extent can we show that there is a clear link between what is a really lucrative tax break for those who are benefiting on the one hand and employment creation and retention in our country on the other, which we all support?

Looking at the spread of employees across salary bands for employers who made a SARP return, while the table does not explicitly tell us the salaries of those who benefited from SARP, it is clear that in 2016 four employees across different companies on whose behalf employers made a SARP return were earning between €3 million and €10 million, and 14 employees earned between €1 million and €3 million. Those people were employees of companies which made a SARP return, but the table does not tell us if they were the employees who benefited from SARP. The Minister has confirmed on the record that 18 employees earning in excess of €1 million benefited from SARP in 2016, and the total number benefiting was close to 800. The average salary for that cohort was €250,000.

It is fair to say that this scheme has grown beyond what was imagined when it was introduced. The only circumstance in which this can be justified is one in which the Minister can say in this House that he has evidence that jobs have been created and retained in our country across the sectors in which this scheme is popular, including IT, financial services, pharmaceuticals and medical, consumer industrial products and services, and other areas of services. That is what I want to hear. I note that for the existing beneficiaries the Minister is retaining the existing situation until January 2020 and that the reinstatement of the cap will have an effect from January 2019 for new entrants. The Minister might elaborate on the logic and reasoning for that.

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