Kevin Humphreys (Labour) | Oireachtas source

This is a very interesting debate. To follow up on Senator Higgins' point, bogus self-employment is increasingly becoming an issue. Hardly a week goes by when I do not meet somebody in the construction industry, the IT sector or the media who is being forced down into bogus self-employment. They are taking all the risks and getting none of the benefits. This is an increasing problem. Such workers need to be protected and I look forward to proposals coming forward to provide such protection. It is the real race to the bottom to force plumbers or bricklayers working on building sites to become self-employed. The same applies to people providing IT services to major firms. This is a way for firms to reduce costs in respect of PRSI, holidays and so on, and to put all of that pressure on those I call the bogus self-employed.

I am delighted that we are having this debate. Like those who have spoken so, I believe that a small enterprise starting off which takes the risk to create work not only for one person but for other members of their families and their communities should be rewarded and assisted at every opportunity. However, we also need to have a very honest conversation in this regard, particularly as to the cost involved. The question of an opt-in nonsense. I believe in social solidarity so whether one can opt in to pay a tax is a non-runner. The strong help the weak. A company that is operating strongly should pay PRSI if there are to be benefits for the self-employed. Those self-employed people who are in a precarious position will obviously opt in and those doing well will opt out. Where is the social solidarity if that happens? The notion of an opt-in is a total nonsense. If we introduce it, then it must be for everybody and everybody must pay. Let us have that truly honest discussion.

Senator Butler referred to a 5% stamp. If that is to be the case, can I have a refund please? May I have my 9% back? For somebody in employment, the PRSI package is 14.75%. Let us be honest. The cost of the benefits for an employee is 14.75%. If someone is to get the same benefits by paying 5%, it is a nonsense. Let us have a real discussion on this. If people want to opt in to PRSI and get all the benefits, that is the cost.

Senator Higgins made another good point. There is a constant argument that there is a rural-urban divide or one between the self-employed and employees. It is said the self-employed get nothing. I have met so many self-employed people who say "I get nothing". Yet, when one goes through the benefits, they say they did not realise that, for example, they get a pension.A contribution for the pension to get a contributory old age pension of €238 per week is a real benefit, but people are not aware that there are benefits for paying that stamp. People conveniently forget that, as Senator Higgins said, over 20,000 qualified for a means tested social welfare payment. An employee only gets a social welfare payment for the first nine months for their PRSI payments. Then they go to the same scheme as the self-employed, so there is not a great difference.

If we wish to be honest with people who are risk takers, let us have that conversation about the benefits they will gain for their contribution and what the true cost is. When I have had that discussion with self-employed people they have told me clearly that they are not prepared to pay anything relating to the true cost. If one talks to employees, they say they would far prefer to pay 5% instead of 14.75%. Let us have a true and honest conversation about this. People will say that the employer's contribution tops up the employee's, but that is part of the employment package and is part of the overall cost of an employee. That is where the overall percentage arises. When we go to public consultation we should have honest answers. Let us have that type of new politics, to use those much maligned words, where we honestly tell people the cost and the benefit and explain that social solidarity does not work unless everybody pays. There is a real and significant cost for the self-employed if they opt in, and I believe they should opt in. In fact, they should be in it. I do not believe it should be an option. In social solidarity most people should try and help weaker members of the community and provide a safety net.

As I travelled around and spoke to people in Dublin Bay South during the last general election campaign I spoke to many people who are self employed. As soon as I spoke about the real cost of paying for the benefits of PRSI they immediately said that was not for them and that they preferred to pay the lower cost. However, if one speaks to somebody who has gone through the trauma of losing their business and losing everything, they tend to say, "If I had known that safety net was there, of course I would have paid into it", so there are two huge alternatives. Something else I have noticed is that the employers' groups have not been banging down my door with regard to increased payments of PRSI for the self employed. It appears to have gone over their heads, because their members are saying they do not wish to make any additional payments.

The sentiment of the motion is correct. There should be a safety net for everybody, but there is a cost. If we wish to do this honestly, we should put that out for public consultation and tell people what the true cost is. I thank the Minister for coming to the House.