Pat Gallagher (Donegal, Fianna Fail)
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68. To ask the Minister for Enterprise, Trade and Employment if he agrees that business costs brought about by legislation on minimum wage, pensions, sick leave and so on are posing an increasing burden on small businesses, leading to business closures in the SME retail and hospitality industry and changing the very fabric of the communities in rural Ireland; the measures he intends to take to mitigate the effects of such legislative measures; and if he will make a statement on the matter. [10135/25]

Peter Burke (Longford-Westmeath, Fine Gael)
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The Government recognises that there have been cost developments for firms in recent years, arising from both the wider inflationary trends – particularly energy costs – as well as Government mandated changes in the form of improvements to working conditions across a range of areas including progress towards introducing a living wage, auto-enrolment retirement savings scheme, the right to request remote work, sick pay legislation and improvements to parent’s leave and parent’s benefit.

The impact of these costs was assessed in a report, ‘An Assessment of the Cumulative Impact of Proposed Measures to Improve Working Conditions in Ireland’ which I requested from my Department and the Department of Social Protection last year. The report estimates that while additional wage costs arising would be moderate across the economy, for some certain sectors (accommodation and food, and retail) the additional costs could be potentially more significant.

The Government has taken an active approach in supporting SMEs, including retail and hospitality firms. In May 2024 a range of additional measures aimed at reducing costs for small and medium sized businesses were introduced. These included:

• Ensuring that the employer PRSI threshold is explicitly considered as part of the Low Pay Commission deliberations and is reviewed on each occasion that the minimum wage is increased.
• Increasing the employer PRSI threshold from €441 to €496 with effect from 1 October 2024.
• Reopening the Increased Cost of Business Scheme for another 14 days and launching a second phase of the Scheme targeted at businesses in the retail and hospitality sectors;
• Doubling the Innovation Grant Scheme from €5,000 to €10,000;
• Increasing the maximum amount available under the Energy Efficiency Grant Scheme to €10,000 and reducing the business contribution rate from 50% to 25%;
• Widening the eligibility for the Trading Online Voucher and doubling the grant to €5,000;
• Increasing the lending limit for Microfinance Ireland loans to €50,000 from €25,000;
• Widening the eligibility for the Digital for Business Consultancy Scheme;
• Launching a new ‘Ireland’s Best Entrepreneur Programme’ to encourage entrepreneurship;
• Launching the new online National Enterprise Hub for SMEs to access information on the wide range of Government business supports;
• Implementing an enhanced ‘SME Test’ by the Department of Enterprise, Trade and Employment in conjunction with the Department of An Taoiseach;
• Complete research on the impact of Statutory Sick Leave before deciding on any further increases;
• Reviewing the proposed Roadmap for Increasing Minimum Annual Remuneration Thresholds for Employment Permits.

Budget 2025 provided for the introduction of the Power Up Grant. In order to provide payments to businesses before the end of 2024, the Power Up grant was aligned with the Increased Cost of Business (ICOB) Grant scheme introduced in Budget 2024. A business must have received the second ICOB grant and be in the hospitality, retail and beauty sectors in order to receive the Power Up grant.

The Programme for Government ‘Securing Ireland’s Future’ commits to publishing an Action Plan for Competitiveness and Productivity within 12 months. This will aim to make Ireland the most supportive environment for indigenous businesses and the most attractive location for start-ups and foreign investment. This action plan will include tax and wage policy, access to finance, education and training, energy and utility policy, infrastructure and digitisation.

These measures reflects Government’s commitment to facilitating a strong and competitive business environment alongside progressive working conditions for employees.