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Emergency Measures in the Public Interest (Covid-19) Act 2020: Motion (Continued)

Wednesday, 3 February 2021

Dáil Éireann Debate
Vol. 1003 No. 7

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(Speaker Continuing)

[Deputy Marc MacSharry: Information on Marc MacSharry Zoom on Marc MacSharry] An issue is beginning to surface with these people. For people with modest means, bills for the telephone, broadband, electricity and so on may become significant. They may have been in a position to deal with those costs over the past nine or ten months while all the family was based at home and, perhaps, the husband and wife or couple were working from home. I understand that a modest relief may be claimed by people who are working from home. Perhaps the Minister will clarify that in his response. I believe the relief to be of the order of €3.50 per day which, over a long period of time, can amount to a significant amount of money. There seems to be some confusion as to whether the onus is on the employee or on the employer with regard to the relief. It is unclear if the employer is to provide this money and then claim it back from Revenue or whether it is for the individual employee to claim the relief in his or her own annual return. I would appreciate it if the Minister could provide some clarity in that regard.

I believe both Ministers are on record as saying that, while this extension is to last until 31 March, and my God do we all yearn for an improvement in the number of Covid cases and an increase in the number vaccinated which would permit a return to work or some level of normality at that date, our most optimistic forecasts do not remotely suggest such a date. An extension of these supports will, therefore, be required. I know the Minister has indicated that they can be extended to June 2021 but, in reality, we need to send a message loud and clear to the people that we are prepared to extend it for the entirety of the year so that we can deal with the Covid problem while at the same time ensuring that people are given adequate support, that they will not be left behind, and that the budget will be provided for that.

I notice Deputy Dillon has now joined us. I will pass over to him in just a couple of seconds, with the permission of the Leas-Cheann Comhairle. I reiterate the call I made to the Ministers last week with regard to the extension of the Covid restrictions support scheme, CRSS, to more businesses. I gave a very detailed example last week of 17 wholesale bottlers that require admission to the scheme, but there are many more such firms. On the enterprise side, the Minister of State, Deputy Troy, is very much in favour of this. I hope he will not find the Ministers' Departments wanting in providing for it. A safe and fair way to do this might be to extend it to any business that currently does not qualify but which is subject to a commercial rates bill.

Deputy Alan Dillon: Information on Alan  Dillon Zoom on Alan  Dillon I appreciate the opportunity to speak on this important motion today. Last month, I welcomed clarification from the Minister for Finance that the period for determining eligibility for the employment wage subsidy scheme, EWSS, during the first and second quarters of 2021 is to be the same period in 2019. This will elicit a sigh of relief from many employers and their employees. There were early complaints about the scheme arising from issues such as the processing of wage subsidy payments to employers taking up to six weeks. I understand that the revised payment schedule is now, thankfully, ensuring speedier delivery. This, in turn, will support and boost cash flow within businesses.

I commend the Minister, Deputy Donohoe, on the EWSS as there have been very few issues with the scheme over recent months, with one exception. There are, however, concerns emerging about the uncertainty as to whether it will be extended in its current form beyond late March. An issue being raised with me increasingly over recent weeks has been the extension of the EWSS beyond 31 March 2021. I appreciate the Minister's opening statement that there will be discussions on this matter. Both employers and employees are fearful that they may lose the enhanced rates which are in place until that date. I urge the Minister to extend the scheme for as long as possible and until the vaccination roll-out programme has reached a critical mass and we can avoid a cliff edge. Almost 1,200 businesses in Mayo availed of the EWSS during 2020 and it is serving as a vital support for those businesses in a wide range of sectors that have had to close their doors for significant durations during this pandemic.

On a separate note, I welcome the recent announcement of the tourism business continuity scheme. Some €55 million will be provided to employers who fall outside the Covid restrictions support scheme. While it is a step in the right direction, it still falls short. I regret to say that there are still some businesses which do not meet the eligibility criteria for the scheme, which I understand to have been designed for those ineligible for the CRSS. There are businesses connected to the tourism sector, including laundry service providers to the hospitality sector and audiovisual engineering providers in the entertainment sector. These businesses are truly on their knees while other businesses are in receipt of supports.

I implore Departments and Ministers, including Deputies Catherine Martin, Humphreys and Michael McGrath, to work together to find suitable funding for those falling between the cracks considering the range of support schemes available. Just because they do not have premises to which the public have access, it does not mean that they are immune to the economic impact of this pandemic. Significant collaboration between Departments is needed as a matter of urgency.

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty Cuirim fáilte roimh an Aire. An tAire will recognise that my party and I worked constructively to address many of the gaps in the old temporary wage subsidy scheme, ensuring a higher rate of subsidy for low-paid workers and the inclusion of women returning from maternity leave. As he will know, I was critical of the new scheme that was introduced in September of last year on the grounds that it significantly cut the levels of wage support for workers. I warned the Minister at the time, and have consistently done so since, that the Government was walking into a jobs crisis if the rates of wage support were not enhanced. I am thankful that, on 20 October, the Government changed direction and enhanced these rates in a decision which I welcomed. However, the Minister made clear at that time that the enhanced rates would only last until 31 January, after which they would again be cut to the lower rates of €203 and €151.50, arbitrary rates that risked another cliff edge. As I said on 6 January, to make this cut during the period of level 5 restrictions, which were all but certain to continue beyond January, would be reckless and would lead to wage subsidies being cut for more than 300,000 workers. At that time, I called on the Government to extend the existing rates until at least 31 March 2021. I welcome the fact that the Government has now done so with this motion.

In January alone, payments of €331 million were paid out to 44,800 employers, supporting the salaries of 315,200 workers. This is money well spent. Had the Government not supported incomes and businesses through deficit spending, it would be a different story. What is now a supply shock would have become a demand-side crisis with permanent job losses and business failure. The deficit has served its purpose and we must now turn our attention to the future.

Recovery will take time. In its most recent quarterly bulletin, the Central Bank suggested that employment will not recover to pre-pandemic levels until 2022. Given that this is the case, wage supports must remain a feature of our economy in the medium term. Workers and employers cannot afford uncertainty, cliff edges or last-minute announcements from Government. Workers and businesses need assurance that wage supports will remain in place beyond March.

We must also be ready to put in place longer term solutions. There is no need to reinvent the wheel. While we introduced schemes that subsidise a fixed proportion of wages, others utilised short-time working schemes whereby employers pay their employees for hours worked while the State compensates employees for a portion of their pay for lost hours. Germany had such a scheme in place for more than a decade, which helped stave off the high levels of unemployment seen elsewhere during the previous recession. Short-time working schemes are a well-known and successful labour market tool to reduce unemployment which the Minister should consider as a long-term tool.

I will finish by commenting on an issue which has affected a great many workers. It must be remembered that the Government calculated the subsidies under the wage subsidy scheme as a percentage of net earnings or take-home pay after tax. These earning have now been taxed and workers are subject to what is, in effect, a double deduction from their pay. In the North, in Britain and in Denmark, wage subsidies were calculated as a percentage of gross pay, which was then subject to tax. There was no double deduction in those jurisdictions and no taxing of net pay, which is in itself an oxymoron. The decision by Government to act differently here was foolish and unnecessary.

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