Leo Varadkar (Dublin West, Fine Gael)
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Question 74: To ask the Minister for Enterprise, Trade and Employment if he will implement the single recommendation of the business regulation forum that he established in 2005 to introduce a standard cost model as used in Denmark and the Netherlands to objectively assess the administrative cost for businesses to comply with new and current regulations; and if he will make a statement on the matter. [25672/07]

Micheál Martin (Cork South Central, Fianna Fail)
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In response to the business regulation forum recommendation and to progress the agenda of reducing administrative burdens for business, I established the high-level group on business regulation under the chairmanship of the Secretary General of my Department. The high-level group comprises representatives of Departments and agencies, the business sector and a representative of ICTU.

The business regulation forum did not recommend the introduction of the standard cost model as applied in the Netherlands and Denmark. Instead, the forum recommended that "given the resource implications associated with undertaking a full baseline measurement exercise, a prioritised and selective approach is the most realistic way forward for Ireland." The high-level group is pursuing such a prioritised and selective approach.

The high-level group has decided to focus initially on ways to reduce, simplify and eliminate unnecessary administrative burdens and associated costs in the five priority areas identified in the business regulation forum's report and will capture the savings arising from the work on a case by case basis. The five priority areas identified by the forum are taxation, statistical reporting, environmental regulations, health and safety regulations and company and employment law. I expect the group to submit an initial report to me by July 2008.

In the recent past I have taken several initiatives to help reduce the administrative burden on business. These include audit exemption, as at the end of last year legislation was introduced to raise the audit exemption thresholds applying to small companies in respect of turnover and balance sheet to €7.3 million and €3.65 million, respectively. The previous thresholds were €1.5 million and €1.9 million. This will remove the compulsory annual audit costs from the very large number of companies qualifying from the enhanced exemption level.

In July 2007 the Government approved the general scheme of the companies consolidation and reform Bill as prepared by the company law review group and the Bill is currently being drafted. The proposals will bring the existing 13 Companies Acts into one and, in addition to a number of significant proposed reforms, will make it easier for firms and practitioners to understand and comply with the law relating to the incorporation and operation of companies in Ireland.

In June 2007, new regulations were introduced to include in one text virtually all of the specific health and safety laws which apply generally to all employment. This replaces and repeals a wide list of existing legislation. The new regulations are designed to be user-friendly and to assist those referring to health and safety regulations to find most of the general safety provisions in one text.

I take this opportunity to welcome Deputy Varadkar to this area of policy and I look forward to ongoing engagement with him.

Leo Varadkar (Dublin West, Fine Gael)
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I thank the Minister and look forward to our engagements.

Unfortunately, I do not have a copy of the report in front of me, but my understanding is that five recommendations were made and among those was the use of the standard cost model in assessing regulatory impact.

Will the Minister introduce this model and if not, why not? Will he follow the example of the Netherlands by setting a real target for reducing the cost of regulation? The Netherlands planned and succeeded in reducing the cost of regulation by 25% over five years and now plans to do the same over another five-year period. If the Minister sets a real target on reducing the cost of red tape on business, his efforts could be benchmarked.

Micheál Martin (Cork South Central, Fianna Fail)
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We will not introduce the standard cost model as employed by the Netherlands, although we have engaged with Dutch authorities and they made representations to the business regulation forum on the application of the model there. One of the key issues is required resources in terms of a base measurement that a standard cost model would entail. We would need a significant cohort of civil servants in every Department, co-ordinated by the Department of Finance to oversee a standard cost model. Some of the methodology used by a standard cost model can be used, primarily to measure reductions achieved rather than identify burdens in other areas. In other words, we are identifying key areas brought to our attention by business, where we could make significant progress on reducing the regulatory burden.

The EU has set a 25% reduction target, which we will be signing up to. There is a significant implementation piece around that, but nonetheless we subscribe to the EU-wide policy of endeavouring to achieve a macro-reduction in regulation for business.

Leo Varadkar (Dublin West, Fine Gael)
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I understand what the Taoiseach has said to be somewhat different. He stated Ireland will play its part in reducing the cost of regulation. That is what one says when there is no plan to do anything. Has the Government formally signed up to a 25% reduction target and if not, when is it intended to do so?

I accept the Minister's statement on not implementing the standard cost model in the way it is done in the Netherlands. The implication is that it is intended to introduce it in some sort of Irish way. Perhaps the Minister will expand on that?

Micheál Martin (Cork South Central, Fianna Fail)
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As a backdrop to this, it is worth pointing out that the World Bank's report, Doing Business 2008, ranked Ireland eighth out of 178 in terms of ease of starting and running a business. Only the UK and Denmark are ahead of us in the EU.

That said, we acknowledge a clear need to reduce regulation on business and I have already outlined some of the steps we have taken on this, such as the audit exemption threshold. In response to the business regulation forum, we have in essence established a high-level group chaired by the Secretary General of my Department, which will concentrate on several areas. These include taxation and statistical reporting, as companies are complaining that they have too many forms to complete to fulfil a range of requirements. There are also environmental and health and safety regulations, as well as company and employment law.

One of the most effective ways to do this is through modernising legislation, which we did with the health and safety area. Company law is the next big area. Modernising legislation would demand a significant collective exercise by this Oireachtas because it is so large, but in itself it will simplify very significantly the regulatory process for starting and incorporating a new business. We are taking that approach and I want quick hits on the issue. I wish to achieve and if anybody in the Opposition has any suggestions for quick hits in regulation, I will not be slow to adopt them and to work with people.