Dáil debates
Tuesday, 3 October 2023
Saincheisteanna Tráthúla - Topical Issue Debate
Business Supports
10:45 pm
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I thank the Minister of State, Deputy Richmond, for his time this evening. We have seen the rapid escalation in the cost of living over the last number of years, much of it driven by inflation and coming off a low-cost basis. We have also had a lot of policy-driven increase of costs. As the Minister of State finalises, with his colleagues, the budgetary measures over the course of the next six days, I appeal to him to maximise the supports to hard-pressed families who have had to sustain huge costs increases in energy, among other costs they have had to sustain over the past year. Last year's supports were very welcome. I very much hope that we could do at least the same this year.
I note that the Low Pay Commission has asked for a 12% increase in the minimum wage, building towards a living wage in 2026 of €14.80. That constitutes a 12% increase on employers. While there is not an employer in the country or a person that would not acknowledge that this is very badly need we must be cognisant of getting the balance right in supports for business. This is a sector predominantly with low margins and highly labour intensive industries who, if they are in food or hospitality or are supermarkets or food manufacturers, are hugely dependent on things like and refrigeration and manufacturing costs with those huge energy increases. The increases in wages over the past years have, of course, put pressure on them but we have also had statutory sick pay, the auto-enrolment for pensions, and the enhanced protective leave entitlements that will come. In certain sectors there were other operational and capital expenditure pressures. In the retail sector now, for example, there is the deposit return scheme. For most businesses this will require a capital of investment between €15,000 and €50,000 and additional staff costs to operate and cater for that. It is a good environmental measure that all industry and all businesses support but we must begin to offset some of these costs against, for example, employment PRSI rates. We must look again to the energy scheme, the temporary credit and business energy support scheme, that we did last year. It came to an end in July and claims will have to be in by the end of September. I would like to see that scheme being extended and the eligibility revised to admit additional people, particularly those in the highly energy-intensive areas, such as retail, hospitality, food manufacturing and so on.
As I say, while seeking maximum supports for families and acknowledging we need to transition towards a national living wage, with increases in January of up to 12% being spoken of, on this occasion and for the next three years, I believe when it comes to the business sector that the Government needs to offset this increase against other measures which businesses can embrace.
The difficulty is we are talking about small independent retailers, restaurants, bars, hospitality generally and manufacturing which employ approximately 1.2 million people, as the Minister of State will be aware, with up to 250 employees per company and some companies employing as few as nine. They employ huge numbers of people in total, contributing to every household in the country. While we want to do all we can to offset the costs of families, we must ensure also that we are protecting employment and the cost of doing business through introducing the appropriate measures for them.
10:55 pm
Neale Richmond (Dublin Rathdown, Fine Gael)
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I greatly welcome this opportunity to respond to a salient and timely Topical Issue from Deputy MacSharry. I am grateful to the Deputy for giving me this opportunity to lay out a few things on my mind and, indeed, on the Government's mind as we approach the budget next Tuesday.
As the Deputy will be aware, I tour the country every week visiting businesses in every county, and these are the concerns that are raised in businesses of all sizes. It can be the retail sector, which is the largest private sector employer in the State or the owner of an SME, which employ in excess of 75% of people in the State.
The costs are mounting. I do not need to list the measures that the Government is introducing regarding increasing the minimum wage, moving towards a living wage and much else. These are well signalled and we will not be changing these plans.
The Low Pay Commission report has been received by Government. I am awaiting that decision to be made by the Cabinet not only regarding the recommendations for a minimum wage but also regarding the sub-minimum rates of the minimum wage, which I believe have been flagged in Private Members' business by the Cathaoirleach Gníomhach, Deputy Quinlivan's party as well as the Labour Party. Throughout this, the Government is well aware these much-needed changes to employment law and the employment area in the State come at a serious cost, not for the Government per sebut for the businesses that have to implement them. We acknowledge that the costs for businesses more generally have gone up exponentially over the past couple of years, and not only due to inflation, be it rising food inflation, which thankfully is starting to come down, or rising energy costs, which have been coming down.
The Deputy referred saliently to the temporary business energy support scheme, TBESS, in terms of the supports given to businesses over the past year. More than 30,000 businesses have applied for this scheme. Businesses with ten to 50 employees were the most common group to avail of this. In Sligo alone, the Deputy will be aware that 767 claims were received and processed for the TBESS scheme in the past calendar year, with more than €2 million paid to businesses in the county. This scheme has been expanded in recent months.
The new development of the business users support scheme is for those businesses, not necessarily in my constituency but probably more widely, which use kerosene, with a minimum payment of €500 towards their increased kerosene costs. This follows on from temporary reductions in VAT on electricity and gas and much else, as well as the general significant supports that are available through Enterprise Ireland or local enterprise offices. I do not need to go through the individual counties' returns.
The Deputy mentioned the deposit return scheme that is due to come on board. This is something that was raised by Mr. Finbarr Filan, a retailer in the Deputy's own county. The Deputy knows him well. A good guy, a stand-up guy and a pillar of his community, Mr. Filan runs an excellent supermarket in Sligo and has raised the fact the smaller retail stores similar to his own and probably a little bit smaller are not able to avail of grant aid. That is certainly a serious ask I am making, that we are able to expand that not just to the large multiples or retailers but to all sides. We need that scheme to work, as the Deputy correctly says, because it is not just an environmental matter. I do not know how many times over the past two decades I have been to conferences and meetings where we have talked about deposit return schemes and following continental examples. We are now making it a reality, but we appreciate the cost of that reality needs to be met by Government as well as by the retailers.
The closing point I will leave the Deputy with is that, in relation to the new rights and the changes to the minimum wage that have happened, are happening and are signposted to happen, one of the main things the Government is undertaking through my own Department and the Department of Social Protection, which is my other Department, is a serious review of how those costs are impacting businesses and what can be done. We hope to have that report published in December, and what will then follow is where the Government needs to step up to meet the needs of businesses to make sure these changes can be implemented properly, because they will be implemented.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I thank the Minister of State. There is not an employment organisation in the country that does not agree with transitioning to a minimum wage, that does not agree with the economic measures that have been done for families - more are needed - and that does not agree with the additional issues around statutory sick pay and whatever, but it is to balance that against their rising costs in an appropriate way. As I said, employers' PRSI is one way. Other tax credit schemes are another way. A further extension to the temporary business energy support scheme and a re-look at the qualifying criteria would be hugely beneficial.
The deposit return scheme is fantastic, but we must acknowledge the capital outlay, in particular, of the larger stores. Some of the smaller stores have exemptions, etc. One retailer, for example, employs approximately 85 employees. These food-intensive supermarkets and independent retailers have huge electricity costs because of the need for refrigeration, freezers, etc. From 2019 to 2023, its wage inflation was 44% and the cost of electricity increased by between 72% and 100%. We must find ways to offset some of this. IBEC, Chambers Ireland, RGDATA or the other retail and trade associations such as the Restaurants Association of Ireland, the vintners, etc., all acknowledge that these are vital improvements for workers. They only want help in offsetting those costs so that they do not have to bear the brunt of them entirely on their own. At times in the past, when things were perhaps better for people, employers were in a position to step up that little bit more. Unfortunately, at the moment they are put to the pin of their collar. While I hope we maximise our outlay for families next week, let us also not wait for the Minister of State's December report. Let us take the appropriate steps at a minimum with a temporary credit against employers' PRSI and an extension and a revamp of the temporary business energy support scheme so that businesses will have some chance.
I appreciate the Minister of State's time and very much hope my words can be reflected in some way in the announcements of next Tuesday, which I hope to be in a position to support.
Neale Richmond (Dublin Rathdown, Fine Gael)
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I fundamentally agree with the Deputy. The Deputy and I know better than most that there are an awful lot of promises made in this House in relation to the support needed for families and individuals in the cost-of-living crisis, but we also know that while we can make all the promises we want, if we do not have a thriving functioning economy, it is all for naught. We need the businesses and the economic powerhouses to produce the tax returns to allow us take the necessary measures that will be announced next week in the budget, be it in social welfare payments or support for that squeezed middle the Deputy defends every day, be it in Sligo, Leitrim, Donegal or the small part of Roscommon he also represents.
On the report, I fundamentally take the Deputy's point. We will not be waiting for the result of the report. That will be supplementary to what will be announced next Tuesday in the budget, affecting both my own Department and all Departments, because this is an all-of-government approach.
I reassure the Deputy that I am in full agreement with his points and the overall thrust. On what can be done and the most important thing the Government can do, we are making massive changes. They are necessary but we acknowledge they come with a cost that is largely borne by the same employers we require to fuel and drive our economy. The most important thing we can do is signpost those changes. There can be no surprises. Every employer in the country knows statutory sick pay is moving from three days to five days on 1 January. I will sign that order on New Year's Day. They also know we are moving towards a living wage and we will achieve that as per the timeline set out. It will not change. We will not deviate, but I fundamentally agree there are a number of measures that can be taken in relation to tax credits, in terms of grant aid through the various State agencies and through low-cost finance, and, crucially, through the budgetary supports there will be for businesses next Tuesday. I will not reveal what those supports are now because they have not been decided and they probably will not be decided until late - until Sunday night. The Deputy has been through more budgets than I have and he knows this is the way these things will be decided.
We simply have to support businesses on this journey. I will commit to the Deputy tonight that his points will be fed into that discussion and we will, crucially, support those businesses.