Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I compliment Deputy McNamara on the drafting of this amendment. It is a masterpiece of drafting and I am sure had to be read on many occasions by those souls who judge what is acceptable and not acceptable before they realised it was acceptable.

To speak to the substantial matter Deputy McNamara raises, the primary qualifying criterion for the employment wage subsidy scheme is that the employer must be able to demonstrate that the business is operating at no more than 70% in either the turnover of the employer's business or the customers' orders received by the employer by reference to the period from July to December 2020 compared with the same period a year ago.

The Deputy's amendment would change this eligibility criterion to a 30% reduction in turnover for the entire year, which is far broader than has been provided for. The employment wage subsidy scheme is an economy-wide scheme that will focus primarily on business eligibility, delivering a flat rate subsidy to qualifying employers on the basis of the number of paid employees on the employer's payroll. This adoption from the temporary wage subsidy scheme will allow employers to rely on the continuation of support over a longer period of seven months while also ensuring that such a support is sustainable and affordable.

As many of the strictest public health restrictions on the economy have been eased, it is appropriate that the level of State subsidy also be moderated, while recognising that the economy is unlikely to return to normal for many for a while yet because of the continued need to observe some requirements such as social distancing. As a result, the employment wage subsidy scheme has broader application than its predecessor in, for example, its inclusion of employees who were not previously eligible, such as seasonal workers and newly hired personnel. It will be in place for longer than its predecessor and trade-offs are, therefore, necessary in relation to some criteria to ensure the scheme is sustainable in cost. All the conditions of the turnover test have been carefully calibrated in that regard and it is expected that this scheme, in its relaunch in a new form, will cost €2.25 billion. It is, therefore, a substantial scheme.

I will deal with the point that was raised by Deputies McNamara and Michael Healy-Rae. The challenge I have with the amendment and the substance behind it is threefold. First, if we were to make this change, it would have a major impact on the overall cost of the scheme. What Deputy McNamara is proposing would not just affect the sector about which he has raised an important concern. Rather, it would have an economy-wide effect. The knock-on effect of the proposal would be highly unpredictable in terms of its additional cost. One thing I am sure of, however, is that it would give rise to significant additional costs in a scheme that is already set to cost €2.2 billion in additional funding.

Second, I respectfully say to Deputy McNamara that there is an inconsistency at the heart of the case that is being put forward. Many of the businesses that have raised this issue, and that are being well served by the Deputy with this amendment, are indicating a dire business or economic outlook for the second half of the year, while also indicating that they expect the trading performance for the rest of the year to be better than the eligibility criteria for this scheme. The inconsistency is that cannot be both. My expectation, as we move through this scheme, is that many of the companies and employers Deputy McNamara refers to will, unfortunately, qualify for this scheme. I use the word "unfortunately" deliberately because these employers do not want to be on this scheme. They want to trade in normal conditions and employ people through their own revenue without needing or expecting a subsidy of this kind from the State. The reason many of them will ultimately qualify for the scheme is that I expect they will meet the eligibility criterion of recording a decline in turnover of 30% or more. If, as we work our way through the year, I find that the eligibility criteria we have set are undermining significantly the viability of many employers, I will examine the matter. What I am trying to do is what Deputy McNamara and other Deputies raised. It is my genuine view that a 70% turnover threshold is one that very many companies, unfortunately, will reach in the second half of this year.

Finally, the extension of this scheme is far beyond the period that many had called for. In order to extend the scheme to the end of the first quarter of next year, we have to look at ways we can ensure that, at a cost of over €2 billion, we are doing what we can to make it more sustainable. Many of the schemes with which this scheme was compared in other debates will come to an end before this scheme does.

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