John Perry (Sligo-North Leitrim, Fine Gael)

I can answer that question. It is evident that an evaluation was conducted - the scheme cost €373.2 million in 2010, and if one considers that 1.8 million people are currently working in Ireland, of which 700,000 work in small companies, 137,000 work directly in IDA and an equivalent number in Enterprise Ireland companies, it is a question of affordability. Unfortunately, the evaluation of the Social Insurance Fund found that the tills are empty.

I fully accept that reducing the rebate to employers from 60% to 15% puts great pressure on small companies. The sad reality is that because we are borrowing from the IMF, it leaves the Government with few choices. An evaluation was carried out by the Department of the Finance which found that the scheme was no longer sustainable. The bottom line is that the scheme cost €247.9 million in 2009 and €373.2 million in 2010, which is a significant amount.

The backbone of our economy is the 200,000 companies employing fewer than ten people and giving employment to 700,000 people. The action plan for jobs is focused on increasing the number of jobs in SMEs by creating 100,000 new jobs by 2016. While the reduction of the redundancy rebate will have an impact, the Government has alternative schemes to encourage people to create jobs. The job of government is to make people employable and to encourage enterprise. The Government is incentivising companies to create jobs through the action plan for jobs, the lowering of the VAT rate, the reduction of the PRSI in the expectation, as the Taoiseach stated, that 50,000 small companies would each created one job at little or no cost to the State.

In 2010 it was costing the taxpayer €7 million each week to fund the rebate of the redundancy payment from the Social Insurance Fund. That is not sustainable. My job as Minister of State with responsibility for small business is to encourage employers and give them ten reasons to create a job and not ten reasons to make people redundant.