Abolishing USC can ease pressure on firms for pay hikes - Kenny
Published 14/01/2016 | 02:30
Talk of a growing economic recovery will lead to higher wage expectations but the abolition of the Universal Social Charge (USC) can relieve the pressure on employers, Taoiseach Enda Kenny has said.
As he launched the Government's new strategy for getting 50,000 long-term unemployed people back to work, Mr Kenny said he did not want to see anybody left behind in terms of wages.
A study by Eurostat last year showed that wages in Ireland are increasing at one of the slowest rates in the Eurozone.
However, several unions are expected to place pay claims in the coming months while a key slogan in Fine Gael's election campaign will be "making work pay".
Asked by the Irish Independent if his party's policy for increasing the pay of low-income earners would lead middle income workers to seek better pay, Mr Kenny said: "Clearly as the economy improves the situation insofar as wages are concerned is of interest to people. That's why we've committed to abolishing Universal Social Charge.
"From a government point of view the first thing we did was reverse the minimum wage cut that was introduced by the previous administration.
"What we need to do is to continue to make the country attractive from an economic point of view and in particular from a personal taxation point of view," he said.
The Taoiseach admitted: "Wages, of course, are always an issue and will continue to be an issue.
"But for us the abolition of the USC and increased disposable income of people, to having better jobs that pay is an essential part of the future."
He also denied that Fine Gael's promise to totally abolish the USC was putting the economic recovery at risk, as claimed by Fianna Fáil.
"Fianna Fáil voted against all of the changes to USC that the Government introduced. It's a bit Irish or maybe hypocritical to suddenly understand that where we want to be is an attractive country for investment and for location and for people who want to come back," he said.
Mr Kenny went on to describe the USC as a "hated tax".
The Pathways to Work 2016-2020 plan launched by Mr Kenny and Tánaiste Joan Burton yesterday sets a target of getting 60,000 long-term unemployed people referred to contracted employment services which will offer essential group and one-on-one support services.
It looks for enhanced engagement between jobseekers and Department of Social Protection facilities as well as an increased focus on activation programmes such as work placements, education and training.
Speaking at the launch in the Guinness Storehouse, Education Minister Jan O'Sullivan said there will be a greater focus on apprenticeships.
"Significant reforms have been made in modernising the existing apprenticeship system through the work of the Apprenticeship Council.
"The planning and development of 25 new apprenticeship programmes is currently underway and will lead to a number of these progressing to enrolment later this year," she said.
Ms Burton added: "The goal of Pathways is to ensure that as many jobs as possible go to people on the Live Register, so that the recovery benefits everybody and no one is left behind.
"This new Pathways strategy sets out clearly how we will ensure full employment with 2.2 million people at work by 2020, by identifying key actions for us to deliver and challenging targets to meet."