IF THE minimum wage was shown to be an obstacle to job creation in any particular sector of the economy, then the Government would have to address the issue, Minister for Finance Brian Lenihan warned last night.
The Minister, who was attending the MacGill Summer School, also issued a strong warning that no group would be exempt from consideration when it came to implementing the recommendations of the McCarthy report on public service staffing and expenditure, and this included social welfare recipients.
He told reporters “a lot of progress had been made” in preparing the legislation for the National Asset Management Agency.
“A draft Bill has been finalised and will be considered by the Government in the next few days and it is my intention to publish draft legislation by the end of the month.”
On basic pay rates, he said: “The minimum wage issue has been under debate in recent months. Clearly if the minimum wage becomes an impediment to job creation the Government has to look at it.
“It’s not that clear, by the way, that the minimum wage in general poses an obstacle to job creation but there is a danger that, if it poses an obstacle to particular sectors of the economy, it will have to be addressed in that context.”
Asked about the recommendation in the McCarthy report for a 5 per cent cut in welfare rates, he said: “Government has made no decisions on the options offered by Mr McCarthy – each of these will have to be examined in turn and a collective decision will be arrived at by the Government.
“But we do have to recognise that expenditure on social welfare at €22 billion is more than a third of total State expenditure. The Government gave a substantial social welfare increase in the last budget, on the basis that there would be an increase in the cost of living and we now know there has been a substantial decrease.” The Economic and Social Research Institute had pointed out that there had been “a very big redistribution of income”.
The Minister shared a platform with Labour leader Eamon Gilmore, who said: “My chief criticism of the Government has been its almost exclusive concentration on the banks and the public finances, and the relatively limited attention that has been given to the real economy. That is a mistake. Every worker who loses their job costs the exchequer at least €20,000 in taxes forgone and social welfare benefits paid.”
Fine Gael TD George Lee said: “What Ireland needs is a new era of responsibility; an era where Governments take responsibility and stand up for ordinary people in the face of powerful vested interests.” It would also be an era “where banks are held to account for the massive public rescue effort they have been gifted with and are forced to play a far more active part in the restoration of credit flows throughout the economy”.