Trevor Ó Clochartaigh (Sinn Fein)

I move amendment No. 3:

In page 6, before section 4, to insert the following new section:

"4.—The provisions of section 3 shall apply to new jobs only.".

I want to outline the thinking behind the amendment from the Sinn Féin perspective. The Bill is intended to halve the employers' rate of PRSI on jobs that pay up to €356 per week. This move is unlikely to create many new jobs.

Instead it will likely precipitate extensive wage cuts because employers will be strongly incentivised to bring wages that are currently in or around the €400 mark down to that level. We in Sinn Féin are concerned that, given the way the Bill is currently drafted, it would act as an incentive to employers to cut wages. The purpose of our amendment, therefore, is to act as a barrier to that happening. The wage cuts that will inevitably ensue will have a serious, negative impact on Exchequer finances. Not only will the revenue raised from employer PRSI contributions and that from employees' taxes be reduced, the State will also end up spending much more on in-work benefits such as the family income supplement.

Some 90,000 workers live in relative poverty and it is madness to risk adding substantially to that number. The sum of €356 per week is below the poverty line for many family sizes. The current employer PRSI rate is not the reason there are so few jobs. The collapse in domestic consumer purchasing power is the key problem. We see evidence of this in the large drop of 4% in GNP in the first quarter. This Bill incentivises lower wages, which will compound that collapse and, in turn, the jobs crisis. The same failed approach that we have seen from the previous Fianna Fáil Government is being maintained by the Fine Gael-Labour Government, and it will not work.

High energy and rent costs are two more significant factors preventing employers from creating jobs. The Government has not moved on either of those factors. In addition, we need an urgent rent and rates review. The purpose of our amendment is to limit the new lower rate of employers' PRSI to jobs that are clearly new. There is a question as to how that will be policed. It could be done in one of two ways or a combination of the same. For example, each employer who wants to avail of the reduced rate could send an application with some accompanying evidence to a panel of officials from the Department of Jobs, Enterprise and Innovation, as well as trade union and employer representatives, who within two weeks would assess whether the post is new. If they are satisfied it is, they could sign off on the reduced PRSI rate.

Alternatively, a person who earns more than €356 and who has come under pressure to take a pay cut to €356 or who has been let go either during or upon completion of a contract only to be replaced by someone on the wage of €356 could challenge this at the Rights Commissioner's office or in the Employment Appeals Tribunal. That could be done in much the same way as an unfair selection for redundancy can currently be challenged. I commend the amendment to section 3.