Dublin Chamber calls for the phasing out of PRSI

THE Dublin Chamber of Commerce has called for the phasing out of PRSI over the next two years.

In its pre Budget submission, the chamber called on the Minister for Finance, Mr Quinn, to begin this process in the 1997 Budget by cutting employees' PRSI in half.

The chamber has also called on the Government to:

. increase tax allowances and bands further

. continue reducing employer's PRSI;

. reform child income support;

. continue phasing down of corporation tax;

. a maximum 2 per cent target for the growth of the public service pay bill.

According to Ms Mary Finan the president of the Dublin Chamber, the elimination of PRSI would have a dramatic effect on both lab our costs and the number of people at work. "It would go a long way towards meeting the Government's aim of creating the right conditions for greater employment," she added.

In total, the chamber recommends £300 million in employment tax cuts, with cuts in employees' PRSI taking up the bulk of this at £200 million.

It also recommends that £30 million be spent on cutting employers contributions and £30 million on reform of child income support.

Halving employees' PRSI would benefit a married couple with two children on £15,000 by £5.73 a week. This rises to £12.20 a week for the same couple with one earner on £25,000.

The chamber's economic director, Mr John Donnelly of Deloitte & Touche, also warned that the current strong growth in the economy could give rise to complacency on the public finances.

"The economic strategy now required is to create conditions which will increase employment by rewarding work and ensuring wage moderation beyond the end of the PCW," he said.

He added that the Government must continue to ensure that the 1997 Budget targets preserve the option of joining EMU in 1999 and make Ireland attractive for investment.