Minister for Enterprise, Peter Burke, has implied that continued analysis of suggested regulatory alterations, including an expansion of paid sick leave and the elimination of sub-minimum wages, could potentially benefit Ireland’s struggling small to medium-sized businesses, even if these actions are ultimately ratified.
According to him, one of the motivations for requesting various reviews was to assist SMEs, and even if these changes are eventually implemented, any delay would cushion SMEs from the immediate, aggregate effect of the original timetable.
During a post-budget discussion on Wednesday, the Minister admitted that he was unsuccessful in his attempts to lower the VAT rate for the hospitality sector to 9 per cent. Despite this, he highlighted several substantial aids that were offered, and mentioned that regulatory actions in the pipeline had been postponed for further examination.
He conveyed how the new SME test was embedded into the heart of the Government, allowing for the appraisal of any regulatory adaptation that could potentially affect that sector. He stated that the process for other regulatory modifications has been deliberately slow, providing them with the opportunity to utilise the various supports available.
However, the Minister’s decision to request additional reviews for the extension of paid sick leave from five to seven days starting from January, along with a suggestion by the Low Pay Commission to eradicate sub-minimum wages for those under 20 years old, has sparked criticism from unions. They argued that these issues underwent extensive examination and discussion before these proposals were made.
He stated, “I have indeed scrutinised the increased cost of regulatory changes. Regarding sick pay, we are currently evaluating that and we are examining a research piece that will enable us make a more educated decision on it. We are also studying the sub-minimum [wage] rates; this is another proposed regulatory change that we are responding to very cautiously.”
The cost implications of multiple simultaneous measures have the potential to exert significant pressure on businesses, he revealed, without intending to belittle the possible benefits of these actions. There’s been apprehension amongst unions that the government might postpone or stagger the launch of the 80 pence increase in the national minimum wage, announced during the Budget.
The Minister lauded its initiation on the first day of January as an exceedingly substantial government action, asserting that those earning the minimum wage would significantly benefit from the raise. The rise from €12.70 to €13.50 will elevate the weekly earnings of an individual on minimum wage by €31.20, summing up to an annual increase of €1,622.40.
A disproportionately large portion of the minimum wage workers in Ireland, totalling around 165,000, comprises women, young labourers and disabled individuals, with most of them being part of the retail, hospitality and services sectors.