Paul Murphy
Question:61. Deputy Paul Murphy asked the Minister for Enterprise, Trade and Employment if he is planning to pause the planned increase in statutory sick pay days; and if he will make a statement on the matter. [17044/24]
Ceisteanna Eile - Other Questions
Employment Rights
In June 2021, the Minister's Department issued a press release, the strapline of which was: "All workers to get 10 days paid sick leave phased in between now and 2025". Now it is being reported that the Minister is going to betray this promise because of pressure from business owners. I have a very simple question. Will he will confirm or deny that he is going to pause the planned and previously promised increase in statutory sick days?
I thank the Deputy for the question. The Sick Leave Act 2022 introduced employer-paid, medically certified statutory sick leave for the first time in Ireland. Commencing on 1 January 2023, the initial statutory entitlement was up to three days’ sick leave, which increased to five days on 1 January 2024. This could potentially increase to seven days in 2025 and ten days in 2026.
Introducing statutory sick leave forms part of the Government's efforts to develop a more inclusive and more competitive economy and a fairer society. It is about making work pay and was designed in consultation with the Minister for Social Protection and the social partners - employer groups and trade unions – to roll out on a phased basis.
Furthermore, section 10 of the Act provides a mechanism by which individual businesses that are struggling financially can avail of protection from the Labour Court from having to pay sick leave for a defined period of time. However, I acknowledge the concerns raised about the cumulative cost of regulation to business, especially in the short term. That is why a range of measures is being brought forward to assist businesses in adjusting to these increased costs as well as more generally to improve competitiveness of firms.
It is important also to note that statutory sick leave has been recognised by employer groups as beneficial to society and the economy. Statutory sick leave is demand led, offers a floor level of protection and does not interfere with existing, more favourable sick leave schemes. It is also a valuable public health measure, reducing the likelihood of infectious disease transmission in the workplace. Officials in my Department are carefully assessing the impact of statutory sick leave on businesses by sector and company size to inform the decision in respect of the timing and scale of the next phase in the roll-out of the scheme, including the number of days. This information could also inform the design of targeted supports, where necessary.
That was as clear as mud; we do not have an answer. Is the Minister going to deliver the sick days that are promised to workers, which the Minister said are not just an issue of workers' rights but also public health? This is about forcing mostly low-paid workers to go to work when they are sick. Is the Minister going to deliver on that or pause it in the interests of those business lobbyists who are calling for this? During the debate on the Bill, I pointed out that a wide-open loophole had been stitched into the Bill precisely to allow the Government, under pressure from business lobbyists, not to proceed with this measure. At the time, we were told there was no need for our amendment, the Government would go ahead with this and workers would get their sick days. However, the Minister is not giving a clear answer today as to whether the sick pay days will be increased in line with what was promised. Even the promised increase to ten days would still leave us behind many other European countries. We should not believe the stories of big businesses putting on the poor mouth when profits are actually going up. They are just looking for an excuse not to give more rights to workers in terms of sick pay.
I join with Teachta Murphy in pressing the Minister on this. The Minister can clearly come out and debunk what is being put out the media. The suggestion in the media is that he will put a pause on the provisions. That is something he either is or is not actively considering now. He can very easily, quickly and simply either confirm or deny what we have read in the media. It is unfair to those workers who depend on this measure and believe it is coming. I shared Teachta Murphy's concerns about the Bill and put forward a number of amendments, but the Government pressed ahead with it. The Minister said he was going to deliver this, and now we read that there is a potential for it to be paused. I press the Minister to either confirm or deny that. I encourage him to read the ICTU report on the cost of doing business. It debunks an awful lot of the myths that have been put into the public domain by very well-off employers.
That was an excellent report from the Irish Congress of Trade Unions and I advise the Minister to read it. This is not the first time this morning that questions were posed on Fine Gael's commitment to modest adjustments to Ireland's sick leave regime. I note the Minister did not give me a straight or direct answer earlier. It would provide some reassurance to workers across the country if he were to restate this morning the commitment that has already been made to introduce broader sick leave arrangements. They are modest proposals. They barely bring us into line with countries against which we like to compare ourselves, as I said earlier. These are not radical reforms. They are modest reforms, the kind any decent society should be proud to introduce. The Minister has the opportunity here to restate an already pledged commitment. That is all he would be doing. He should not break his promise to Irish workers.
I was very clear in my answer to Deputy Nash on a living wage. I said we were going to wait for the report from the Low Pay Commission. That is the mechanism and structure that is in place, and I am not going to pre-empt that report.
This question is on sick pay.
On sick pay, we are very committed as a Government to improve the rights of employees. We are in the month of April. Section 6 of the Act clearly sets out that the decision has to be made in quarter 4 and a ministerial direction has to be given on 1 January next year.
I make all my policy decisions based on evidence. Through the year, I will look at how the economy is progressing and how the reforms that have been made continue to be progressed.
I am proud to be part of a Government that introduced parental leave and sick pay, increased the minimum wage by 46% since 2015, put forward on Second Stage last night a Bill on pension auto-enrolment to protect the future of workers and protect the most low paid in our economy. We are on a strong trajectory now. We brought in sick pay for up to five days. We will consult with all groups. That is what my Department is about. We protect employees, businesses and consumers. We have to work to ensure that all in the economy keep going on a sustainable footing. I will do that, but no one is going to force me into decision in the month of April when, through section 6 of the Act, I have to make it in quarter 4. I will monitor the economy and my determinations will be based on evidence.
It is scandalous that the Fine Gael Árd-Fheis was used to fly a kite in the interests of the employers to say the Government is considering delaying sick pay.
Economy first, people second.
That is what happened at the Fine Gael Árd-Fheis. That is what was reported. Now, in the Dáil, the Minister responsible has refused to clarify or give some reassurance to workers on whether the number of sick pay days are going to increase or not. That is scandalous. Workers have a right to know. The Minister cannot just fly a kite in the interests of the employers by telling them not to worry, we are going back to the basics and the blueshirt tradition of supporting big business against workers, and then refuse to clarify for workers whether they are going to be able to get the sick pay they are entitled to.
Let us look at the agenda of these people. Neil McDonnell, the chief executive of the Irish Small and Medium Enterprises Association, ISME, said that five days' sick pay is perfectly adequate. For whom is it perfectly adequate? It is not adequate for a seriously ill worker, nor even for an average worker. Anyone who gets Covid-19 is required by the HSE to self-isolate for a minimum of five days. That means the person's annual sick leave is gone in one go. The next time that person is ill, he or she will be forced to go to work despite being sick. Workers need reassurance. The Minister should be able to answer the question clearly today and say he intends to go ahead with sick leave increases. However, it appears he is not willing to do that.
I understand that Fine Gael Members like to come in here and throw bouquets at themselves, and fair play to them for doing it. It is not lost on me, however, that during its time in Government, Fine Gael cut the sick leave entitlement for serving civil and public servants in half, without a backward glance or second thought. It was aided and abetted by its then partners in Government. That was a retrograde step.
During the pandemic, plenty of us, not just Fine Gael and its Government colleagues, spoke about sick leave being an important instrument of public health. Yet, the Minister has said he is not committed to delivering on the commitment given by his Government. He has been asked a simple question. He is either on the track to providing ten days' paid sick leave, or not. He can share that information with us now because the speculation in the media is that he is going to pause the measure. That would be absolutely disgraceful. I want to hear that he is not going to do that. It was a commitment given by his Government. It would be very simple for him to say today whether he will or will not support and honour that commitment.
I will not take any lectures from the Opposition about protecting workers. I am proud to have been a member of a Government that put €12 billion into the economy through the pandemic unemployment payment to ensure that people had certainty of income right through very difficult times in our economy. That ensured the economy was in good shape to deliver those commitments, protect those workers and ensure that business could take off like a rocket to employ people post the pandemic. That is what sustainable finances are.
On two occasions this morning, I have been asked to pre-empt decisions to be taken in quarter 1 of next year. I am not prepared to do that. The trajectory for sick pay is clearly set out in the legislation. It is on statute. However, section 6 of the Act gives us an opportunity to review how the economy is doing. When that is in legislation I am absolutely obliged to do that. I will work with employers. As I said in regard to lower paid workers, judge us on the evidence. Look at the minimum wage, which increased by 46%, sick pay, which we brought in, and pensions auto-enrolment. Last night, many Deputies voted against the future pension rights of workers in this economy. We are a Government that protects workers. We have shown and done that. We brought in remote working as well, which has changed the public service in terms of productivity, certainty and how it can operate. I will not take lectures from the Opposition in regard to protecting employees' rights in this economy.
Is the Minister of State going to publish the guidance?
Question No. 62 taken with Written Answers.
Tourist Accommodation
Brendan Griffin
Question:63. Deputy Brendan Griffin asked the Minister for Enterprise, Trade and Employment how he plans to support and compensate business owners in towns such as Killarney, County Kerry, where the displacement of tourism accommodation for use as emergency accommodation has resulted in significant reductions in footfall and consumer spending; the supports he is planning for the broader SME sector and businesses exposed to vastly increased overheads; and if he will make a statement on the matter. [17023/24]
I congratulate the Minister, Deputy Burke, and Minister of State, Deputy Higgins, on their recent appointments. I wish them the very best during their tenure. The Minister of State, Deputy Calleary, has been there all along and I wish him continued success as well.
This question is a very serious one related to the reduced footfall in towns such as Killarney resulting from displacement for emergency accommodation purposes. What can be done to compensate and support businesses in those scenarios and, similarly, in other towns throughout the country?
I thank Deputy Griffin for his kind words and also for his advocacy on behalf of the tourism sector, both as a Teachta Dála and in a previous ministerial role.
The importance of the tourism sector to the economy and to communities in every corner of Ireland is well understood. It is recognised that the use of tourist accommodation to support the Government’s response to the humanitarian crisis has impacted on the sector. Fáilte Ireland identified that, in November 2023, 12% of all registered tourism accommodation stock nationally was under contract to the State. An additional amount of tourism-type accommodation that is not registered with Fáilte Ireland is also contracted to the State. My colleague, the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, Deputy Catherine Martin, has made up to €10 million available for a programme of supports targeted at tourism businesses experiencing particular challenges linked to the reduction in footfall in regions most impacted by tourism bed stock displacement. This programme of supports includes investment in sustainable tourism development and promotion, industry digitalisation, promotion of domestic tourism and festivals, and recruitment and retention initiatives.
I am acutely aware that many businesses in all sectors are facing difficulties due to the cost of doing business. With this in mind, as part of the budget 2024 package and in order to help businesses with their increasing overheads, the Government announced the introduction of the increased cost of business, ICOB, grant, which is intended to aid firms with the challenge posed by increased costs. The ICOB scheme is up and running and will benefit up to 121,000 small businesses. Local authorities throughout the country are now rolling out the scheme with the Department and have all written to ratepayers setting out the information on the scheme.
On 5 March 2024, my Department and the Department of Social Protection produced an assessment of the combined cost of measures to improve working conditions in Ireland. Reflecting the findings of this assessment, a range of measures is being brought forward to assist businesses in adjusting to these increased costs. These measures include the preparation of a paper on PRSI; making available up to €15 million to local enterprise offices, LEOs, to enable a top-up payment on the energy grant; reducing red tape; and accelerating the roll-out of fully-functioning national enterprise hubs.
I appreciate the Minister's response and the many measures being taken to address the difficulties facing many businesses throughout the country. All of those measures are very welcome. It all helps. I am speaking as a representative of the people of County Kerry where tourism accounts for a significant portion of overall economic activity. Fáilte Ireland's figure of 12%, for example, would be higher in Kerry. We have taken a huge number of refugees and people seeking international protection. This is coming off the back of three extremely challenging years, in 2020, 2021 and into 2022, as a result of Covid-19. We have had an extremely challenging time for our economic base.
One estimate last June showed that Killarney, for example, had lost €100 million as a result of displacement of accommodation beds. That was only up to last June. This is the scale of the problem. Government schemes need to be in that type of league in order to address this problem. That is only for one town. Other towns such as Dingle, Kenmare and Tralee are also suffering. This is the scale involved and the context in which I raise this matter. While I welcome all of the measures, we have found ourselves in an extraordinary situation since March 2022 in particular and there has to be the extraordinary response from the Government to assist these businesses.
I thank Deputy Griffin for his response and for setting out clearly the pressures the sector is under in his constituency and right across the south and west coasts. I fully understand the pressures and the acute nature of the problem. I am due to meet with the hospitality and tourist forum in May with the Minister, Deputy Catherine Martin. Obviously, the forum will discuss this issue. We will also frame a significant package for businesses in the days and weeks ahead that will try to assist them with the pressures the Deputy mentioned.
I know the issue of bed accommodation is acute in County Kerry. Looking at the statistics for Ukrainian citizens, approximately 45 a week are now exiting bed accommodation, with about 15 coming in. Nonetheless, we have other pressures such as international protection, on which we have to live up to our obligations as a State, and the pressure is acute in that regard.
We will work with the sector. Our economic brand is so important for tourism and it plays a big role for economic activity in regions such as the Deputy's.
I thank the Minister. I welcome and encourage that engagement with industry and the representative bodies in particular. The Minister is very welcome to come to Kerry at any stage and engage with the operators on the ground. He has been very good in the past in coming to the county and meeting people. They have always been very impressed with him and he has always responded, which is really important and appreciated. It would also be welcome if he could do that throughout the business sector because it is from the ground up that we can really get what is going on at the coalface.
We are where we are with the challenges we have faced over recent years, but there is scope within the overall budgetary parameters to assist the businesses that have fed the economic growth the country has experienced over the past ten-plus years. We need to protect those businesses and, as the economic cycle progresses and perhaps there will be further challenges or downturns, these are the businesses we will need to get us through the difficult times to keep our services funded and the country on the road. We need to support them now, therefore, at this difficult time. Support at the beginning of this Thirty-third Dáil was more than anything I could have expected in the context of the Covid response, and that now needs to be replicated.
I thank the Deputy and am happy to take him up on his kind invitation. It is so important we work closely with the sector he referred to. We had initiatives in the past such as The Gathering, and when our economy was on the floor, we saw how much that sector played a part in enhancing economic activity and getting employment back. It is at the forefront of our minds. As I said, it is important the increased cost of business grant be drawn down because as we are getting to a stage when we are looking for more money in the Department, we need that to be drawn down. If it is not, the Deputy knows what arguments will be put up by the Departments of public expenditure and reform and finance when we are looking for more money as part of this package. I appeal to business owners, therefore, to demonstrate the commitment in drawing down that grant. There is a one-page form, it is very easy to fill out and there is a payment of up to €5,000 to assist the business. We will work with and listen, which is important, to the sector in the days and weeks ahead.
Small and Medium Enterprises
Ruairí Ó Murchú
Question:64. Deputy Ruairí Ó Murchú asked the Minister for Enterprise, Trade and Employment if he will outline the work that is being carried out by his Department to provide supports for micro, small and medium-sized businesses, particularly in the hospitality sector; and if he will make a statement on the matter. [16985/24]
Déanaim comhghairdeas leis na Teachtaí go léir as a gcuid postanna nua agus sean cinn fosta.
Will the Minister outline the work being carried out by the Department to provide supports for micro businesses, SMEs and, in particular, businesses in the hospitality sector? We all know about the issues they face with the general cost-of-living crisis and the additional costs and pressures they are under, and promises were made by the previous Minister in this regard.
The Government is committed to backing business and will continue to work closely with small businesses nationwide to support their growth, help them find new markets and assist them in remaining competitive and resilient. The 31 local enterprise offices, LEOs, play an extremely important role providing assistance directly to micro, small and medium-sized businesses as well as promoting entrepreneurship within towns and communities. LEOs are the first-stop shop at a local level providing expert advice and guidance, financial assistance and offer a signposting service for Government supports available to businesses. It is this unique position that makes the LEOs so effective. They help businesses start and grow in every county and region, as evidenced by the year-on-year employment growth of LEO client companies. The LEOs offer grants to small businesses to enhance their productivity and improve their competitiveness, as well as to assist businesses in taking advantage of opportunities and addressing the challenges of doing business, in particular in decarbonisation and digitisation.
The Government recognises the recent challenges facing small businesses, especially in hospitality and retail, and has moved to support these sectors specifically by providing a top-up of up to €3,000 as part of the energy efficiency grant. Almost 43,000 businesses in these sectors are now in line for this change. This will help businesses to reduce their carbon emissions and overall energy costs by accelerating the adoption of low-carbon technologies or processes, and this enhanced grant for hospitality and retail is available from this week.
As the Deputy will be aware, as part of budget 2024, the Government signed off on a package of €250 million for the increased cost of business grant, which is a vital measure for small and medium-sized enterprises. Local authorities, funded through my Department, are administering the grant to qualifying businesses, including those in hospitality, on behalf of my Department and I strongly encourage hospitality businesses to take up this grant.
My Department is also developing a national enterprise hub, which will be launched shortly and will give businesses an entry point at national level to all Government supports. The national enterprise hub will include dedicated phone lines with business advisers to direct businesses to the most appropriate assistance for their needs, including for the hospitality sector.
Everyone is well aware of the local enterprise offices and I know the one in Louth does a great deal of work in engaging, signposting and facilitating all sorts of grants and training. We also know about the work Enterprise Ireland and the IDA do and that is all very welcome, but a huge number of businesses are under severe pressure. There is the general cost-of-living crisis and the added cost of fuel and, even with changes that have been made from a legislative point of view, the price of public liability insurance has not fallen. Businesses are dealing with all this and with whatever other necessary moves were made that added costs to businesses. I do not believe I am mistaken when I say Deputy Coveney, when he was Minister, indicated promises had been made and that there would be some follow-on schemes, beyond what the Minister has referred to, in respect of hospitality and retail.
I fully understand the pressures businesses are under throughout the economy at this time, not least those businesses in retail, wholesale or hospitality, which are key. We are supporting them, with €250 million through ICOB and a 9% VAT rate for electricity and gas out to October. There is the grant in respect of energy efficiency that I spoke about, at €15 million. VAT thresholds have been increased for goods and services. There is also tax warehousing at 0%. We are encouraging people to enter into a phased payment agreement by 1 May and to work with the Revenue Commissioners, because we are not out to close any business. We want to work with businesses and keep them viable.
Inflation has fallen significantly and is now 4.1%, whereas it was double that in November 2022, again demonstrating that policies are working. If we are compared with other jurisdictions, failure rates for businesses are about 1.9 times higher in the UK. In our jurisdiction, that has stabilised, with a failure rate of 27 per 10,000 businesses. It was much higher pre-pandemic and, indeed, as we know, at a very difficult time in 2008, 2009 and 2010. I am demonstrating the work we are doing and will continue to do to listen to businesses, to work with them and to ensure they will stay viable.
I hope a considerable degree of listening to businesses is being done because if the Minister is listening to the same businesses as I am, he will hear about the severe pressure they are under. I accept those supports that have been mentioned. No business is going to turn up its nose at them but some of them are under severe pressure at this time. I thought a proposal had been made that there was going to be something beyond this and even more significant. I do not think we should get into the frame of comparing ourselves with Brexit Britain. Nobody is shocked that there has been a huge impact from what was a dreadful decision it made, although it has the right to do that and we are where we are. We just need to make sure viable businesses will be kept in play.
All the measures the Minister outlined are welcome, such as work the LEOs and the agencies do. I have seen the work that even the likes of the regional development centre in Dundalk does to pull together businesses and make sure they can go from strength to strength. We want to see all that, but we need to make sure businesses that are under pressure will be provided with the necessary supports.
I congratulate the new Minister and Minister of State, and the renewed Minister of State as well, and wish them every good fortune and support in their tenure.
I wish to ask a simple question. There appears to be strong evidence to the effect that many businesses are affected by a multiplicity of regulations imposed upon them and are having difficulty. Recently, a small business brought to my attention the fact that it had to raise an extra €250,000 before ever starting work as a result of the many regulations that negatively impacted it. Can an audit be done of the extent to which this has been the case and how we can directly interact with enterprises, including small businesses, throughout the country to identify and address these negative factors?
I thank the Deputies for their questions. In my comparisons, I am talking about Northern Ireland as well. Hopefully, we do not see that as Brexit Britain.
We are working hard to formulate a cost-of-doing-business package for the SME sector. I hope we will see that in the weeks ahead. We know the acute pressure the sector is under. Every time businesses came under pressure, including from energy costs and inflation, we were there to provide them assistance. We are continuing along that trajectory. There are an array of grants and supports, but we know we have to do more. We are clear on that front and we will do more. That is why I am listening to businesses and examining PRSI and a number of other areas where we can assist them with some of the regulatory changes they have experienced. This also goes to Deputy Durkan’s point on supporting businesses. We are doing just that.
Our economy is still in a strong position and we have 2.7 million people employed, which is a record number. Any decision taken in my Department will be evidenced-based, support employees and businesses, and try to ensure they remain on a sustainable footing.
EU Directives
Ged Nash
Question:65. Deputy Ged Nash asked the Minister for Enterprise, Trade and Employment for an update on his plans to transpose the EU directive on adequate minimum wages; and if he will make a statement on the matter. [17054/24]
Will the Minister of State provide an update on the plans to transpose the EU minimum wages directive by the end of the year?
The directive on adequate minimum wages in the EU was published on 19 October 2022 and must be transposed by 15 November 2024. The directive aims to ensure that workers across the EU are protected by adequate minimum wages, allowing for a decent living wherever they work.
The directive includes three sets of measures. One of its goals is to increase the number of workers covered by collective bargaining on wage setting. This will require Ireland to develop an action plan to enhance collective bargaining coverage by the end of 2025. Ensuring that minimum wages are set at adequate levels is the second set of measures. The directive requires countries with statutory minimum wages, as in Ireland, to put in place clear and stable criteria for minimum wage setting and indicative reference values to guide the assessment of adequacy and to involve social partners in the regular and timely updates of minimum wages. Regarding the third set of measures, the directive provides for improved enforcement and monitoring of the minimum wage protection established in each country. The directive introduces reporting by member states of their minimum wage protection data to the European Commission.
The directive will be transposed into Irish law. Last year, our Department participated in the expert group on the directive's transposition that was established by the European Commission. Our Department has received legal advice on the minimum wage elements of the directive and work is under way to ensure transposition by the deadline of November 2024. The legal advice is that Ireland’s current minimum wage-setting framework, namely, the Low Pay Commission, is largely already in compliance with the provisions of the directive.
A technical group has been established with departmental officials and the social partners to examine what is required to implement the collective bargaining elements set out in Article 4 of the directive. My Department has requested legal advice as to whether any legislative changes are required to transpose this article into domestic legislation by the transposition deadline at the end of the year.
I thank the Minister of State for her response and I noted the engagement earlier with another Deputy on this matter. I spoke about the importance of the national minimum wage, moves to a living wage and setting a higher floor of minimum wage adequacy below which no decent society should allow workers to fall. More important still is the transposition of the collective bargaining element of the EU minimum wages directive. We need enhanced collective bargaining coverage in this country. Fairness for workers can only be achieved by extending that coverage. Central to that is the right to organise. This means workers having access to their trade union officials and all the supports that trade unions provide to workers individually and collectively.
It was mentioned that an examination of enhancing the coverage of joint labour committees and wage-setting mechanisms more generally was under way. That is part of the solution, but it is not the panacea. The JLC system does not overpromise and does not overstate its work or utility. It is limited in its coverage and in what it can do. In the interests of working people, I want the Minister of State to commit to a maximalist approach to the directive’s transposition.
Let me be clear that Ireland is fully supportive of the principles of this directive. It will increase the number of workers covered by collective bargaining, and that is something with which we agree. It is important to remember that, even without this directive, Ireland has one of the highest minimum wage rates in the EU. Article 4 of the directive is specific to collective bargaining in terms of workers and wages. Ireland is a leader on that front, given the Low Pay Commission and the work it does in informing us on national minimum wage rates and the living wage. Ireland has public sector pay agreements, which are achieved through negotiation. The directive requires us to set out an action plan for increasing collective bargaining. That is something we will do.
There are two deadlines, the first of which is the transposition deadline of November 2024 and the second of which is the action plan deadline of the end of 2025. These are deadlines that we will meet.
I advise the Minister of State not to rely disproportionately on the efficacy and utility of the JLC system, good and all as it is, for enabling Ireland to reach its obligations under the minimum wages directive, specifically Article 4. The system is important, and I am proud of the role I played in re-establishing its mechanisms, which are important for low-paid workers, but there are restrictions inherent in the joint labour committee system and the areas it is permitted to cover by law are limited.
If we are interested in ensuring that workers get a greater share of the wealth they produce, a maximalist approach to the transposition of this directive is important. To the best of my knowledge, the density of trade unions in this country is at an all-time low. The market economies that perform best are those that recognise and allow access to trade unions and put collective bargaining and trade union membership and activism at the heart of their economic models. I ask the Minister of State to promote this idea actively.
We should not lose sight of the fact that the overall ambition of the directive relates to the national minimum wage. Ireland has the sixth highest national minimum wage of the 22 EU member states that have national minimum wages. The directive does not attempt to set the minimum wage. Rather, it is about consultation when setting new minimum wages. That is something Ireland is a leader on already and something on which we are continually working.
Regarding trade unions and activity within them, it is up to individual workers to decide how they want to conduct their negotiations. We cannot lose sight of that. We want to increase access to collective bargaining, but people should also have their own choice about how to negotiate.
Export Controls
Ruairí Ó Murchú
Question:66. Deputy Ruairí Ó Murchú asked the Minister for Enterprise, Trade and Employment if he will outline the process his Department uses to assess the granting of export licences for dual-use goods to Israel; and if he will make a statement on the matter. [16986/24]
Will the Minister of State outline the process the Department uses to assess the granting of export licences for dual-use goods to Israel and make a statement on the matter? This question is in the context of Gaza and the worries about a wider escalation. We have seen a genocidal slaughter. We need to ensure that we are in no way, shape or form doing anything that would facilitate the weapon systems being used against the Palestinian people.
Gabhaim buíochas don Teachta as an ceist.
Our Department is the national competent authority with responsibility for export controls, including controls on defence-related exports and exports of dual-use goods. Controls on the export of dual-use items are administered by my Department, in accordance with Regulation (EU) 2021/821 of the European Parliament and of the Council, which set up a Union regime for the control of exports, brokering, technical assistance, transit and transfer of dual-use items. Dual-use items are products and components, including software and technology, that can be used for both civil and military applications.
All export licence applications, including those indicating an end destination in Israel, are considered by my officials in accordance with criteria set out within the relevant dual-use and military EU and national regulations and with Ireland's international obligations and responsibilities as a member of non-proliferation regimes and export control arrangements. On receipt of an application for an export licence, my officials carry out an assessment which includes a series of checks to ensure, as far as possible, that the item to be exported will be used by the stated end user for the stated end use and will not be used for illicit purposes.
As part of their assessment, officials in my Department seek the views of officials in the Department of Foreign Affairs in respect of all applications for export licences, including those destined for Israeli end users. Both our own Department and the Department of Foreign Affairs review all dual-use export licence applications against the eight assessment criteria set out in the Council common position, including "Respect for human rights in the country of final destination as well as respect by that country of international humanitarian law" and "Internal situation in the country of final destination, as a function of the existence of tensions or armed conflicts".
Accordingly, when making their assessment of an application, my officials are furnished with the most up-to-date information, including consultations with technical experts where relevant, which they take into account in the final risk assessment to determine whether to grant an export licence.
My follow-up relates to the criteria and how stringent the assessment and the tests are. Is the Minister of State particularly happy? He mentioned consultations with technical experts. We are talking about computer software and whatever and, as he said, dual-use goods. Some of these can be used for normal necessary regular civilian operations but others can also be used in weapons of mass destruction, as we have seen in the likes of Israel over the past while. It is vital for the Minister of State to give some more detail on these criteria.
Is there anything that we can do to make sure? From the Minister of State's point of view, are we covering all the bases so that he could rest assured that in everything that passes through here that falls into the category of dual use the criteria are sufficient to make sure it does not end up in weapon systems being used by the likes of the Israeli regime?
I absolutely share the Deputy's views on this space and can assure him that applications for dual-use licences in respect of exports to Israel are assessed pretty rigorously on a case-by-case basis in line with the assessment criteria I outlined. There are eight criteria, but the two specific criteria to which I referred are important in this context.
We also seek real-time geopolitical observations from the Department of Foreign Affairs. It is not the Department of enterprise's view alone. We get the most up-to-date political view from the Department of Foreign Affairs and its views are also included in the final decision to grant or deny a licence.
That process is rigorous. There is a series of checks, in so far as we can, to ensure the item to be exported will be used by the stated end-user for the stated end purpose, which is really important, and it will not be used or diverted for any other purposes.
I assure the Deputy that there is no export of military goods from Ireland to Israel.
I welcome what the Minister of States said in the sense that what we are talking about is a rigorous assessment and that the geopolitical situation and all updated information at the time is taken into account. If information were to arise at any point in time that an end-user ended up using something in a weapons system where it had stated previously that this would not be the case, that would result in follow-up and would have an impact into the future. The best-case scenario is that all our checks worked perfectly and we did that, but we need to make sure as best as possible.
We know what is happening at the minute. We know the dangers. We can see exactly what the Israeli regime is doing in Gaza and further afield. We have to do those parts we can ourselves. We need to make sure that no weapons are transferred, even through Ireland, at this point in time. We need to make sure the pressure is kept on regarding the review of the EU-Israel association agreement. Beyond that, we need to make moves as quickly as possible, alongside others, on the recognition of the state of Palestine. Then we need to deal with other stuff, including the Control of Economic Activity (Occupied Territories) Bill 2018. Beyond that, while we have made moves on divestment from companies that have been involved in illegal settlements, we need to make sure that moves from €2.9 million to €4.2 million and that no moneys this State is investing are involved in what is a genocidal apartheid regime in Israel.
If there is any issue in terms of a licence not being followed through and the conditions of a licence being breached, we will bring those to the attention of the authorities within the export licensing section of the Department. If there is any question of the conditions of a licence being breached, that will be investigated.
Enterprise Support Services
Aindrias Moynihan
Question:67. Deputy Aindrias Moynihan asked the Minister for Enterprise, Trade and Employment what action is being taken to strengthen the resilience, productivity and innovation of SMEs to ensure that they remain key drivers of employment nationally; and if he will make a statement on the matter. [17027/24]
Almost 1.2 million people worked in SMEs across the country last year and many of those were in smaller enterprises with less than ten people. I refer to small businesses, shops, pubs and high-street enterprises that have weathered a range of different storms over the years but are now really struggling and under pressure. I want to get an understanding of the support that would be available to ensure that those viable businesses would be able to continue.
Gabhaim buíochas leis an Teachta.
The Government recognises those challenges referred to that are being faced by SMEs. That is why we have, since our inception as a government, put a range of supports in place to deal with Covid-19, supply change disruption, rising energy costs and Brexit.
The Government's White Paper on Enterprise, which we published in 2022, outlines how we will build the resilience and sustainability in our economy as we engage with the two dominant trends of the 21st century - decarbonisation and technological change.
Our Department funds Enterprise Ireland and the local enterprise offices to provide a range of help, advisory services and financial supports to SMEs. These include direct financial assistance through grants, loans and equity investments as well as market research, export development assistance, mentoring and funding for research and innovation.
It is important to emphasise that the challenges are faced by all businesses which is why we have taken steps to extend more support to the non-exporting locally-traded sector. We are currently rolling out the increased cost of business grant, which up to 129,000 businesses across the country can seek to benefit from. In the Deputy's county of Cork, more than 12,000 businesses are eligible to apply. As of this week, 2,500 of them can apply. I reiterate the Minister's call for businesses to engage with this and comment that this is an opportunity to assist with costs at present.
In addition to that, to assist businesses to be more sustainable, productive and efficient, we can focus on lean, green and digital products from the LEOs, which are 31 first-stop shop locally available to provide advice and guidance.
We have allocated an additional €9 million in this year's budget to LEOs to allow them to do that, and in particular to assist businesses in local towns and communities across the country.
We also have a range of products in the growth and sustainability loan scheme and the Ukraine credit guarantee scheme. Finally, we are developing a new national enterprise hub, which we will launch shortly, which will allow SMEs to identify specifically the supports that relevant to them. We know there is a myriad of supports and it can be hard to navigate them at times. This will assist them.
The cumulative cost impact report has been published.
Through that report, Government acknowledges the range of different pressures on various enterprises, but also that certain sectors are under more pressure than others. Hospitality and retail, for example, are seeing a close to 7% increase in their costs in 2024 and that is projected to be up to 20% by 2026. It is clear there are different sectors under phenomenal pressure. We readily acknowledge there has been a very extensive range of supports, which are very welcome. As they are gradually being withdrawn, the pressure is coming on these various sectors and businesses. These are businesses that have, over many years, weathered different storms and have the expertise on hand to do that. They are finding a range of different costs are being added on at this point, which adds to the pressure on them. Is there a plan for coping with that in particular?
We see that. The Department commissioned that report so we could get a full understanding of the impact and that is why we are bringing forward a number of measures. The Ministers, Deputies Burke and Humphreys, are finalising an option paper on employer's PRSI. As I said, we are in the process of paying out €250 million of supports to the smallest of businesses. We are looking at a range of measures to reduce red tape. This will be done in the spirit of the kind of supports we have given to small business in recent years, since we came into office in 2020. These supports were proactive and supportive. As the Deputy said, it is a challenge for some businesses to be weaned off those supports, but we are constantly looking to ensure the supports in place are relevant and assistive. Coming back to the increased costs for business, we have reduced the application procedure and made it much easier to apply as a direct response to feedback from businesses about other support schemes.
I acknowledge the huge range of supports that have been put in place over a number of years, from Covid supports to, as the Minister of State outlined, the support on rates and so many other supports. Some of those are gradually being changed and withdrawn. There is the VAT support, for example, and now the further introduction of the rates support. There are myriad supports there and some of them suit certain businesses more than others. Is there a one-stop shop so businesses can identify which is the most suitable and realistic support for them so they can, in turn, inform and shape further supports? Substantial funding is being made available and it is about a joined-up approach whereby businesses will know where to access any supports that are there, while identifying ones that are required. Businesses are seeing huge costs with the minimum wage, auto-enrolment, sick pay and holiday pay all coming along at much the same time and putting a huge burden on them. It is about ensuring they can identify ways of dealing with it.
I am in support. I emphasise the point being made to me, and I am sure everybody else as well, is the time taken to administer all the available assistance. What used to be contained in a single page now goes to 29 pages, which takes time.
I agree with the previous speakers. I have met many small business owners in County Carlow. Their businesses are barely surviving. Grants are becoming a huge issue. Their outgoings are so much. We all welcome the living wage, the PRSI and all the different sick leave we are now looking at. It is important because people are living longer and it is important they are having a good quality of life, but small businesses, including cafés, restaurants and hairdressers are finding it very hard to survive. We need to do something to support small businesses that are under pressure. There is no doubt that these are the ones that are going to close if we do not put in extra supports. We should get the information and the supports to them quickly and do what we can to support them. Many small businesses are struggling. The Minister of State is committed to it, but we need to help and give them support.
I thank the Deputies. An enterprise hub will be launched in the coming weeks. It will be a one-stop shop so people can identify which specific support is relevant to them without having to go through a myriad of different forms. I keep coming back to this, but we have made the increased cost of business grant as easy to access as possible. I have given Deputy Moynihan the figures for Cork. In Cork county, 12,000 are eligible. In County Kildare, it is applicable to 4,980 businesses and as of now just over 1,400 have applied. In County Carlow, it is applicable to 1,579 businesses and 448 have applied. Going back to what the Minister said earlier, I ask every Deputy to encourage people to apply for this. We have made the process as simple as possible. This will be paid out in the coming weeks up to €5,000. We will introduce more supports and identify relevant practical supports in the coming weeks to assist our smallest businesses.
Business Supports
Robert Troy
Question:68. Deputy Robert Troy asked the Minister for Enterprise, Trade and Employment if he plans to support those SMEs that are currently struggling; and if he will make a statement on the matter. [16996/24]
Marian Harkin
Question:85. Deputy Marian Harkin asked the Minister for Enterprise, Trade and Employment the additional business supports, apart from the increased cost of business scheme, he is considering putting in place, particularly for SMEs to meet the increased cost of doing business; and if he will make a statement on the matter. [17051/24]
I take this opportunity to wish my colleague from Longford-Westmeath, the Minister, Deputy Burke, the best of luck in his new role. It is a great honour for him, his family, friends and supporters and for all of us in County Westmeath that he has been elevated to Cabinet and I genuinely wish him well in the months ahead.
One of the biggest challenges he has is how his Department is going to support the SME sector. We have heard about the assessment of the cumulative impact of the proposed measures for sick pay and auto-enrolment. One would have thought the Department should have done that report prior to introducing all these changes so they could have been introduced on a phased basis. We talk about the grant that is being paid out now, but I will give the example of Wholesome Kitchen in Mullingar. It is going to get a grant of €3,500 but the measures that have been introduced by Government over the past 12 months have added an additional €155,000 per annum to its business costs. While the grant of €3,500 is very welcome and there is no disputing that, the extra cost is €155,000. What we need to look at, and what I am asking the Minister to commit to now, is splitting the VAT rate between food and accommodation, lowering the VAT rate and also ensuring the PRSI rate recognises the fact the minimum wage has increased.
The Minister has asked me to thank his colleague, Deputy Troy, for the good wishes. We will bring forward further supports in addition to the €250 million. We are looking at the PRSI issue for action in the coming weeks. Other issues are budgetary matters and will be considered in the context of budget discussions. I refer to our track record as a Government and the incredible support the Deputy gave businesses during his time in this Department. That track record of direct, proactive support will continue. We will put that into place, beginning with a package in the coming weeks. That is in addition to the those figures, which I keep returning to, because we want to see business with a bigger take-up of it. If there is a bigger take-up for this programme, it will strengthen our case for further funding for businesses. I ask all Deputies to encourage businesses in their areas to do that.
I do not doubt the Minister of State's commitment or the Minister's, but businesses need help now. The cold, hard facts are this money was announced in the budget six months ago and it only opened for applications in the past number of weeks. Businesses are suffering now. They need help now and they need a dedicated focus on how they can be supported. The number of businesses closing weekly is phenomenal. We need the supports now and we need priority given to this now.
I welcome the commitment given on PRSI changes to recognise the increase in the minimum wage but we also need to look at other measures. I gave the example that the measures introduced over the last 18 months are cumulatively costing a fabulous business in Mullingar, County Westmeath, Wholesome Kitchen, €155,000 a year. The grant the owner will get is €3,500. There is an imbalance there. I accept the commitment given today that additional supports will be forthcoming. PRSI changes are needed as soon as possible. Among other things, we also need to look at splitting the VAT rates for food and accommodation and at lowering the rate.
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