IF Michael McLoughlin's business was not in "consolidation mode", he might be encouraged to recruit some new workers after yesterday's Budget. As it is, the savings on employers' PRSI contributions will be a small benefit and may help to put him in a position to recruit next year.
The Drogheda businessman has a payroll of just under £4,000 a week, and under the new Budget provisions he will save 0.5 per cent on the lower PRSI contribution rate.
"Obviously that will have some benefit. Our people have average earnings of £170. But some are above and some are below that." The threshold for the lower PRSI rate will rise to £250 a week, bringing most of his employees into that net.
He will not benefit from the 8 per cent decrease in corporation tax on the first £50,000 of profits from 38 to 30 per cent. His firm, making bridal shoes, is taxed at the 10 per cent manufacturing rate.
The increase in the income threshold at which employees become liable to the 2.25 per cent health and employment and training levies from £178 to £188 a week will ease some of his problems with overtime. His busiest period is from April to July. As some of his workers' basic salary approaches this threshold, he says they object to overtime that will take them into the levy bracket and thus expose all their income to the 2.25 per cent charge.
Mr Quinn has extended that bracket but anything over the £188 a week means that the employees' total salary is subject to the levies. "It will have some effect, but it still means that anybody who does more than two or three hours a week will move above that exemption." In busy periods his employees would do an average of eight to 10 hours overtime in a week.
Mr McLoughlin said he would be keen to use the employment subsidy of £80 a week for employers taking on a person who has been unemployed for three years or more. "People in that situation are usually very keen to work and keen to learn new skills." However, he said the 5,000 places would be "snapped up" very quickly.
He said he would reserve judgment on the Budget until he had a chance to digest it. "It was meant to be a job making Budget, but I think they'd possibly need to go a bit further."
