Fidelma Healy Eames (Fine Gael)

I welcome the Minister to the House. She raised many important issues, some of which I will address while addressing other more general points.

The Department has two important roles. First, poverty is an increasing factor in society and the State must try to ensure every person has adequate income and resources to live with dignity. Second, the Department must ensure a balance between social protection and the incentive to seek and gain employment. The Government must rebuild a broken system. It is a big job. Ireland is perceived as a welfare state, but the rankings of the EU 27 place us considerably below the EU average. The figures do not support the perception.

I wish to address the statutory sick pay proposal the Minister mentioned. She has opened a good debate, but she is not going about it the right way. It is valid that she is trying to tackle absenteeism, but forcing the employer to pay for the first four weeks of an employee's sick leave will kill the goose that lays the golden egg. The employer is the source and creator of jobs. Employers are the multipliers and should not be crucified. Throughout the country, small and medium sized businesses are struggling.

In recent days, an employer of seven employees told me that they gave €7,000 per month to the Exchequer between VAT, PAYE and PRSI. When the employer called the seven employees in, they were told that they would be let go and that the employer would become a sole trader if the Minister's proposal went ahead. The Exchequer would lose money.

Other employers have approached me. One told me that he would be in a position to create 50 jobs in January, but that he would now add them on a subcontract basis. The Government will need to pursue these subcontractors for PAYE and PRSI. It is right to tackle absenteeism, but the Minister is going about it in the wrong way. I have a number of proposals. The Minister will drive business underground, which means more people will be pursued for fraud. The Department is doing wonderful work in that respect already, but let us not bite the hand that feeds us.

Absenteeism costs business €1.5 billion per year. This is a significant problem. Average sick leave in the private sector is six days per year. Average sick leave in the public sector is 11 days per year. The Minister outlined how her Department pays for the HSE's sick leave. This is outrageous. Who should pay for sick leave? Let us face up to it. Surely the employee has a responsibility. The Minister referred to the Dutch model, but we should consider the Swedish model in which the employee, both public and private, pays for the first day of sick leave. Could the Minister draft figures on this proposal? What would it save the State? What if the employee paid for the first three days, after which sick leave would be certified and the State or employer would have some duty?

Let us be careful. Our greatest problem is unemployment. Let us not kill the goose that lays the golden egg. It is important that the Minister examine the Swedish model. When employees were made to pay for the first day of sick leave in the public service, Sweden's absenteeism rate reduced by 40% in one year. In the private sector, absenteeism almost disappeared when an employer gave one week's bonus at Christmas for not being absent. Many good measures can be found, but the Minister's is not the right one. I say this respectfully.

Some employers go bust, become unemployed and have no social welfare. What supports can the Department provide them? They have paid their employer's PRSI. I employed six people for several years. It was unbelievably difficult. I needed to generate business and go out on the front line to deliver the business, but I was the one doing many books at the end of the week because I could not afford to hire someone to do them for me. For these reasons, I see no merit in the sick pay proposal.

An employer who pays S class social insurance might find himself or herself injured or ill through no fault of his or her own, for example, as a result of a car accident. That person would receive no payment until he or she became eligible for the old age pension. Will the Minister explore the UK model, a matter to which I referred in an Adjournment debate? That model allows the self-employed to become employees in certain situations to pay PRSI contributions. This offers them protection when they are injured or ill.

I refer to employment traps that may deter an individual from seeking or acquiring employment. I am pleased that the Minister mentioned one of these, that is, seasonal employment. When individuals finish their employment, they are sometimes left without social welfare for a number of weeks. As the Minister is working on this matter, I will say no more.

Rent supplement is a large trap. A person who receives this benefit has his or her rent paid by the State until such time as he or she gets a job. The rent is then paid out of his or her income, however small it may be. This makes no financial sense for many. However, if the supplement moved to a differential rent system, this situation would be alleviated. After six months of accepting the benefit, only a proportion of a person's total income would be taken. This is what local councils do. It would end the dependency on rent supplement, as the person would only lose in proportion to his or her income. The Minister might consider this proposal.

Long-term unemployment is a major issue. Fr. Seán Healy and Social Justice Ireland have developed a worthy proposal. People want to work. During the Celtic tiger era, the unemployment rate was 4%, of which 1.3% constituted the long-term unemployed. Fr. Healy's proposal is with the Minister. It would create 100,000 jobs at a cost of €150 million to the State. The Minister should consider his proposal. Jobs would be created in the public, community and voluntary sectors with no displacement, people would be paid at the going rate and they would work a maximum of 19.5 hours per week and on a voluntary basis only. There is a great deal of evidence in Galway that people want this. Solicitors, accountants and other professionals have told me that they will work for their social welfare payments if the State provides appropriate opportunities through JobBridge and so on. Not everyone on those programmes will cut grass or paint walls. For example, community welfare officers are burst, so to speak, and need help.

I have a final point on pensions.